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Categories
| REDtone International proposes rights issue of ICULS |
| Business & Market 2009 | |||
| Written by The Edge Financial Daily | |||
| Monday, 12 October 2009 21:38 | |||
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In a statement to Bursa Malaysia, REDtone International said the proposed renounceable rights issue of 10-year 2.75% ICULS, which has a coupon rate of 2.75% annually, at full nominal value was on the basis of 10 ICULS for every 10 shares held. The ICULS will also come with the warrants on the basis of four warrants for every 10 ICULS issued. The statement said REDtone International had procured irrevocable written undertakings from certain shareholders, namely Berjaya Sompo Insurance Bhd, Selat Makmur Sdn Bhd and Wei Chuan Beng to subscribe for their respective direct entitlements to the ICULS with warrants. REDtone International noted that the proposed rights issue of ICULS was the most appropriate option available for the company to raise fresh fund. "The proposed rights issue will enable REDtone International to have substantial interest savings as the coupon rate for the ICULS of 2.75% per annum is lower than its existing average cost of borrowings of about 4% per annum," the company said. Also, it pointed out that the ICULS would enable the company to secure its cost of fund during the tenure of the ICULS, thereby reducing its exposure to interest rate fluctuation.
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