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AE MULTI HOLDINGS BERHAD (“AEM” OR “THE COMPANY”)
(I)
PROPOSED PAR VALUE REDUCTION;
(II)
PROPOSED RIGHTS ISSUE WITH WARRANTS ; AND
(III) PROPOSED AMENDMENT
(COLLECTIVELY, REFERRED TO AS “PROPOSALS”)
Unless stated otherwise, the terms used herein shall carry the same meaning as those defined in the
earlier announcements in relation to the above Proposals.
M&A Securities Sdn Bhd on behalf of the Board of Directors of AEM ("Board"), is pleased to announce
that the Board has resolved to fix the issue price for the Rights Shares at RM0.18 per Rights Share
and the exercise price for the Warrants at RM0.25 per Warrant.
The issue price of the Rights Shares has been determined by the Board after taking into
consideration, amongst others, the following:
(i)
the historical share price movement of AEM Shares;
(ii)
the (5)-day volume weighted average market price ("5D-WAMP") of AEM Shares up to
and including 3 November 2014 of RM0.2149, being the market day immediately
preceding the date of this announcement; and
(iii)
the par value of AEM Shares of RM0.10 each.
The issue price of the Rights Shares of RM0.18 per Rights Share represents a discount of 14.88% to
the theoretical ex-all price of AEM Shares of RM0.2115, calculated based on the 5D-WAMP up to and
including 3 November 2014 of RM0.2149, being the market day immediately preceding the date of
this announcement.
The exercise price of the Warrants has been determined by the Board after taking into consideration,
amongst others, the following:
(i)
the 5D-WAMP of AEM Shares up to and including 3 November 2014 of RM0.2149, being
the market day immediately preceding the date of this announcement;
(ii)
the theoretical ex-all price of AEM Shares of RM0.2115, calculated based on the 5DWAMP up to and including 3 November 2014 of RM0.2149; and
(iii)
the par value of AEM Shares of RM0.10 each.
The exercise price of the Warrants of RM0.25 represents a premium of 16.33% and 18.22% to the
5D-WAMP of AEM Shares up to 3 November 2014 of RM0.2149 and the theoretical ex-all price of AEM
Shares of RM0.2115, respectively.
Premised on the above, the issue price of the Rights Shares and exercise price of the Warrants differ
from that which was announced on 9 May 2014 as well as in the circular to shareholders dated 18
August 2014 (“Circular”). The comparison is as follows:
Issue price of the Rights
Shares
Exercise
price
of
the
Warrants
Indicative price announced
on 9 May 2014 and
disclosed in the
Circular(RM)
0.20
Price fixed as at the date of
this announcement (RM)
0.18
0.20
0.25
As a result, the utilisation of proceeds and financial effects of the Proposed Rights Issue with
Warrants are adjusted, the details of which are set out in the ensuing sections below.
Utilisation of proceeds
Based on the issue price of RM0.18 per Rights Share, the Proposed Rights Issue with Warrants will
raise gross proceeds of RM7.02 million (under the Minimum Scenario) and RM22.65 million (under the
Maximum Scenario).
The proposed utilisation of the proceeds are as follows:
Minimum
Scenario
RM„000
Maximum
Scenario
RM„000
Timeframe of
Utilisation
(from the listing
of the Rights
Shares)
4,000
1,500
1,020
500
5,000
8,000
4,000
5,150
500
Within 6 months
Within 12 months
Within 12 months
Within 12 months
Immediately
7,020
22,650
Details
Repayment of bank borrowings@
Upgrade of machinery*
Construction of factory#
Working capital**
Expenses relating to the Proposals
^
Notes:
@
The Group’s outstanding borrowings as at the date of this announcement is RM21.74 million.
The repayment will save the Group RM0.33 million per annum under the Minimum Scenario to
RM0.42 million per annum under the Maximum Scenario in interest based on an interest rate
of 8.35% per annum.
*
The upgrade of machinery located in Thailand comprises amongst others the addition and/or
replacement of 1 auto machine and 1 photo imaging machine, as well as parts for printing,
shearing, drilling and punching sections of machinery such as frames, rollers and conveyor
belts.
#
Consists of construction of new factories for AEM’s Thailand operations, addition of tools and
equipment, as well as purchase of furniture and fittings and facilities such as computers and
air conditioning. The Company has commenced in August 2014 the construction of a new
factory located at Tambol Prakasa, Amphur Muang Samutprakarn, Samutprakarn Province in
Thailand and is expected to comprise a double storey office cum factory with a built-up area of
1,836 sq m occupying land area of 3,400 sq m. It is expected to have a production capacity of
15,000 sq m. The construction of the factory is expected to cost THB50 million, and is
expected to be completed in April 2015.
**
Working capital comprises mainly general operating expenses, staff salaries as well as
purchase of inventory which includes mainly raw materials used in manufacturing of PCBs such
as are copper clad laminates, industrial chemicals and printing ink.
^
In the event that the actual expense is less than the allocated amount, the excess allocated
amount shall be utilised as working capital for the AEM Group.
The exact quantum of proceeds that may be raised by our Company from the exercise of the
Warrants would depend on the actual number of Warrants. The proceeds from the exercise of the
Warrants will be received on an “as and when basis” over the tenure of the Warrants.
Based on an exercise price of RM0.25 per Warrant, the Company will raise additional gross proceeds
of RM7,312,500 under the Minimum Scenario and RM23,593,875 under the Maximum Scenario from
the full exercise of the Warrants. Any proceeds arising from the exercise of the Warrants in the future
shall be utilised for capital expenditure, investment opportunities and/or working capital of the AEM
Group. The exact details of the utilisation of such proceeds, including the breakdown of the utilisation
have not been determined.
NA, NA per share and Gearing
Based on the audited consolidated balance sheet of the AEM Group as at 31 December 2013, the
issue price of RM0.18 per Rights Share and exercise price of RM0.25 per Warrant, the proforma effect
of the Proposals on the NA, NA per share and gearing of the AEM Group are set out below:
Minimum Scenario
(I)
Audited as at 31
December 2013
RM
Share capital
Reserves
(Accumulated losses)
Capital reserves
Share premium
Warrants reserve
Shareholders’ equity/ NA
(II)
After (I) and the
After the Par Proposed Rights
Value
Issue with
Reduction(3)
Warrants
RM
RM
47,187,750
2,219,068
(29,771,561)
5,765,722
25,400,979
9,437,550
2,219,068
(2,723,764)
10,702,403
5,765,722
25,400,979
13,337,550
2,219,068
(2,915,264)(1)
10,702,403
5,944,722(1)
2,632,500(2)
31,920,979
No. of shares
NA per share
94,375,500
0.27
94,375,500
0.27
133,375,500
0.24
Interest bearing borrowings
Gearing
23,977,704
0.94
23,977,704
0.94
19,977,704
0.63
(III)
After (II) and
assuming all
Warrants are
exercised
RM
16,262,550
2,219,068
(2,915,264)
10,702,403
12,964,722
39,233,479
162,625,500
0.24
19,977,704
0.51
Notes:
(1)
In accordance with the Financial Reporting Standards Implementation Committee (“FRSIC”)
Consensus 13 Expenses Permitted to be Written Off Against the Share Premium Account
under Section 60 of the Companies Act, 1965 (“Act”), costs attributable to the issue of shares
shall be written off against the share premium account in accordance with Section 60 subsection (3) of the Act and Financial Reporting Standard (“FRS”) 132 Financial Instrument :
Disclosure of Presentation if, and only if, it can be demonstrated that such costs are
incremental costs that are directly attributable to the issue of shares that otherwise could be
avoided. All other expenses which do not satisfy the criteria of transaction costs of an equity
transaction shall be expenses off in the period they are incurred. In such circumstances, the
estimated expenses of RM500,000 in relation to the Corporate Exercise were deducted from
accumulated losses by RM191,500 and share premium account by RM308,500.
(2)
Recognition of fair value of Warrants of RM0.09 per Warrant pursuant to the Proposed Rights
Issue with Warrants, offset against the share premium account amounting to RM2.63 million.
For illustration purposes, the fair value of Warrants of RM0.09 per Warrant was derived based
on the Binomial Option Pricing Model. The warrants reserve will be transferred to the share
premium account upon the full exercise of the Warrants.
(3)
The Par Value Reduction was completed on 2 October 2014.
Maximum Scenario
(I)
Audited as at 31
December 2013
RM
Share capital
Reserves
(Accumulated losses)
Capital reserves
Share premium
Warrants reserve
Shareholders’ equity/ NA
No. of shares
NA per share
Interest bearing borrowings
(RM’000)
Gearing
(II)
After (I) and the
After the Par Proposed Rights
Value
Issue with
Reduction(3)
Warrants
RM
RM
(III)
After (II) and
assuming all
Warrants are
exercised
RM
47,187,750
2,219,068
(29,771,561)
5,765,722
25,400,979
9,437,550
2,219,068
(2,723,764)
10,702,403
5,765,722
25,400,979
22,020,950
2,219,068
(2,915,264)(1)
10,702,403
7,030,147(1)
8,493,795(2)
47,551,099
31,458,500
2,219,068
(2,915,264)
10,702,403
29,680,267
71,144,974
94,375,500
0.27
94,375,500
0.27
220,209,500
0.22
314,585,000
0.23
23,977,704
0.94
23,977,704
0.94
18,977,704
0.40
18,977,704
0.27
Notes:
(1)
In accordance with the Financial Reporting Standards Implementation Committee (“FRSIC”)
Consensus 13 Expenses Permitted to be Written Off Against the Share Premium Account under
Section 60 of the Companies Act, 1965 (“Act”), costs attributable to the issue of shares shall be
written off against the share premium account in accordance with Section 60 sub-section (3) of
the Act and Financial Reporting Standard (“FRS”) 132 Financial Instrument : Disclosure of
Presentation if, and only if, it can be demonstrated that such costs are incremental costs that
are directly attributable to the issue of shares that otherwise could be avoided. All other
expenses which do not satisfy the criteria of transaction costs of an equity transaction shall be
expenses off in the period they are incurred. In such circumstances, the estimated expenses of
RM500,000 in relation to the Corporate Exercise were deducted from accumulated losses by
RM191,500 and share premium account by RM308,500.
(2)
Recognition of fair value of Warrants of RM0.09 per Warrant pursuant to the Proposed Rights
Issue with Warrants, offset against the share premium account amounting to RM8.49 million.
For illustration purposes, the fair value of Warrants of RM0.09 per Warrant was derived based
on the Binomial Option Pricing Model. The warrants reserve will be transferred to the share
premium account upon the full exercise of the Warrants.
(3)
The Par Value Reduction was completed on 2 October 2014.
The rest of the details of the Proposals remain unchanged.
This announcement is dated 4 November 2014.