SerSol Shareholders Sanctions Proposed Rights Issue
Issuance of 96.4 million shares on the basis of one Warrant for every one Share
KUALA LUMPUR, 23 FEBRUARY 2013 – The green light has been given to pioneer in paints and coatings SerSol Berhad (“SerSol“, Stock Symbol: SERSOL, Stock Code: 0055) for a Proposed Rights Issue of Shares with Warrants on the basis of one Rights Share together with one Warrant for every one existing SerSol Share at an Extraordinary General Meeting (“EGM”) held earlier this morning.
SerSol shareholders who attended the EGM passed a motion for the Proposed Rights Issue, involving an issuance of up to 96,351,000 New Ordinary Shares together with up to 96,351,000 free detachable New Warrants at an indicative issue price of RM0.10 for each Rights Share, which is renounceable in full or in part on the condition that the Rights Shares and Warrants cannot be renounced separately.
Commenting on the outcome of the EGM, SerSol Managing Director Mr Tan Fie Ping says, “SerSol has been through a lot of ups and downs since our listing way back in 2004 but our shareholders have never wavered in their backing and belief for SerSol, of which me and my fellow Board of Directors are very thankful for. Today’s outcome is an evident show of continuing support from them and this reinforces our perseverance to continue expanding our business with a planned restructuring exercise to transform SerSol from a loss-making organisation into a profitable entity.”
Based on the indicative issue price of RM0.10 per Rights Share and assuming full subscription, the ACE-Market listed SerSol estimates to raise gross proceeds of up to RM9.6 million from the exercise, expected to be completed by the second quarter of this year. RM5.2 million will be used for working capital, and RM2.5 million from the proceeds will be used for the repayment of bank borrowings as part of SerSol’s turnaround strategy to reduce its debts and venture into more lucrative industries. Another RM0.9 million will be used for research and developments purposes and RM0.5 million will be invested to purchase an additional production plant for the production of architectural paints and coatings while the remaining to defray the estimated expenses in relation to the Proposals.
“We have been contacted by property developers who have shown intent in purchasing our products for the use of their development and construction projects. We already have an existing plant but we intend to purchase another production plant as well as new machineries which will definitely increase our production capacity to cater to the demands of these recent interested parties. This consists of two units of high speed dissolver mixing tank, and one unit of water treatment system which will increase the capacity of the plant,” revealed Mr Tan.
During the EGM, shareholders also approved the Proposed Establishment of a Share Issuance Scheme (“SIS”) of up to 30% of the Issued and Paid-Up Share Capital which entails the granting of SIS Options for eligible Directors and employees of SerSol to subscribe for new Shares as well as a Proposed Increase in the Authorised Share Capital to accommodate the issuance of the Rights Shares and any future issuance of new Shares arising from the exercise of the Warrants and SIS options.