TCS Group proposes 2-for-5 rights issue with free warrants

• The construction firm has proposed to undertake a renounceable rights issue of up to 243.6 million new shares at 12 sen per share, coupled with free warrants to raise up to RM29.23 million, according to its filing with Bursa Malaysia.

KUALA LUMPUR (Dec 26): TCS Group Holdings Bhd is making a cash call to raise working capital for its existing construction projects.

The construction firm has proposed to undertake a renounceable rights issue of up to 243.6 million new shares at 12 sen per share, coupled with free warrants to raise up to RM29.23 million, according to its filing with Bursa Malaysia.

The issue price of 12 sen is at a 27% discount over its Tuesday’s closing of 16.5 sen.

In a bourse filing, the company said the rights issue with warrants entails the issuance of two rights shares for every five existing TCS shares held on an entitlement date to be announced later.

The rights issues come with 146.16 million free detachable warrants on the basis of three warrants for every five rights shares subscribed for the proposed exercise.

As at Dec 7 — being the latest practicable date (LPD) — the issued share capital of TCS was RM66.16 million, comprising 429 million shares and 180 million outstanding existing warrants.

TCS is also seeking an exemption for its managing director and largest shareholder Datuk Tee Chai Seng and persons acting in concert (PACs) with him from the obligation to undertake a mandatory takeover offer for the remaining TCS shares and warrants not already owned by them.

Tee and his PAC, Datin Koh Ah Nee — TCS’ second largest shareholder and also Tee’s spouse — collectively hold 243.16 million shares or a 56.68% stake.

TCS said that it has obtained the undertaking from Tee and Koh to meet the minimum subscription level.

The company will not enter into any underwriting arrangement for the remaining rights shares not subscribed for by other entitled shareholders given that the minimum subscription level will be fully satisfied through the undertakings.

TCS noted that it is not the intention of Tee and his PAC to undertake the mandatory offer or to privatise the company via the proposed rights issue with warrants.

It will also seek shareholders’ approval for the proposed exemption at an extraordinary general meeting (EGM) to be convened.

The proposed cash call is expected to be completed in the second quarter of 2024.

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