PETALING JAYA: Iris Corp Bhd aims to raise RM59.33 million from a proposed share issuance of 494.38 million new shares, to be used as working capital and future business projects/investments.
In a filing with Bursa Malaysia, Iris said it had entered into a subscription agreement with Datuk Seri Robin Tan Yeong Ching, Datuk Poh Yang Hong and Datuk Rozabil @ Rozamujib Abdul Rahman for the proposed issuance and allotment of the new shares.
The 494.38 million new shares represents 20% of the total number of issued shares of the company and will be issued at an issue price of 12 sen per subscription share to be satisfied in cash.
Based on the share issuance price, Iris expects to raise gross proceeds of RM59.33 million, of which RM58.83 million will be used for working capital and future business projects/investments and the balance RM500,000 for estimated expenses. The new business projects/investments have not been determined yet.
“The proposed share issuance will enable Iris to raise funds to meet its working capital requirements and to capitalise on future business projects/investments, as and when such opportunity arises, without incurring additional interest costs as compared with bank borrowings,” it said.
The subscription shares are proposed to be placed out to Tan, Poh and Rozabil. Poh is a non-independent non-executive director of Iris while Rozabil is the executive deputy chairman. Both are major shareholders of Iris.
Poh has 0.69% direct interest and 10.26% indirect interest by virtue of his interest in Caprice Development Sdn Bhd while Rozabil has indirect interest of 10.92% by virtue of his interest in Caprice, R Capital Sdn Bhd and Mazer Sdn Bhd.
Therefore, Iris will seek approval from its non-interested shareholders for the issuance of the subscription shares to Poh and Rozabil in respect of their specific allotments under the proposed share issuance.
Meanwhile, Tan is CEO and executive director of Berjaya Corp Bhd as well as chairman and non-independent non-executive director of Berjaya Media Bhd. He is also a non-independent non-executive director of Atlan Holdings Bhd.
A total of 247.19 million shares will be placed out to Tan at a subscription price of RM29.66 million, 197.19 million shares will be placed out to Poh at RM23.66 million while 50 million shares will be placed out to Rozabil at RM6 million.
The share issuance price represents a discount of 11% to the five-day volume-weighted average market price of Iris shares up to and including June 13, 2018 of 13.49 sen.
The proposed share issuance will result in an enlarged issued share capital of 2.96 billion Iris shares and lower its gearing ratio to 0.48 times from 0.63 times as at March 31, 2017.
CIMB Investment Bank Bhd has been appointed as the principal adviser and placement agent for the exercise, which is expected to be completed by the fourth quarter this year.
Iris' share price rose 3.85% to close at 13.5 sen with 21.28 million shares traded on Thursday.