(I) Proposed Diversification;(II) Proposed Rights Issue With Warrants;(III) Proposed ESOS; And(IV) Proposed Increase In Authorised Share Capital(Collectively Referred To As The "Proposals")
| Type | Reply to Query |
| Reply to Bursa Malaysia's Query Letter - Reference ID | IQL-06052015-00001 |
| Subject | (I) PROPOSED DIVERSIFICATION;(II) PROPOSED RIGHTS ISSUE WITH WARRANTS;(III) PROPOSED ESOS; AND(IV) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL(COLLECTIVELY REFERRED TO AS THE "PROPOSALS") |
| Description |
BHS INDUSTRIES BERHAD (BHS OR THE COMPANY) (I) PROPOSED DIVERSIFICATION; (II) PROPOSED RIGHTS ISSUE WITH WARRANTS; (III) PROPOSED ESOS; AND (IV) PROPOSED INCREASE IN AUTHORISED SHARE CAPITAL (COLLECTIVELY REFERRED TO AS THE PROPOSALS) |
| Query Letter Contents |
We refer to your Company’s announcement dated 29 April 2015, in respect of the aforesaid matter. In this connection, kindly furnish Bursa Securities with the following additional information for public release:- 1) Basis of determining the Rights Issue price of RM0.42. 2) Justifications for the Rights Issue price of RM0.42, including justifications for the discount to the five (5)-day VWAMP of BHS Shares of RM0.63. 3) To quantify the theoretical ex-rights price based on the five (5)-day VWAMP of BHS Shares up to and including the latest practicable date. 4) To state the expected paper production capacity and expected paper production output of the machineries and equipment to be purchased. 5) To also state the expected % of paper produced to be consumed by BHS. 6) To elaborate briefly on the arrangements pursuant to the Master License Agreement which allow BHS to market the PRC RBMP Technology and generate additional income including royalty income. 7) To incorporate further description of the pulp and paper industry. 8) To state the effects of the Proposed Diversification on the earnings per share for the financial year ending 30 June 2016. Please furnish Bursa Securities with your reply within one (1) market day from the date hereof.
Yours faithfully, SUZALINA HARUN /WCY Cc : Market Surveillance Dept., Securities Commission (via fax) |
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The terms used herein shall, unless the context otherwise stated, bear the same meaning as those defined in the announcement dated 29 April 2015 in relation to the Proposals. We refer to the announcements dated 29 April 2015 in relation to the Proposals and the query letter of Bursa Malaysia Securities Berhad dated 6 May 2015 in relation to the same. Pursuant thereto, we wish to announce the following additional information in relation to the Proposals: 1. Basis of determining the Rights Issue price of RM0.42. The issue price of RM0.42 per Rights Share represents a discount of approximately 33.33% to the five (5)-day Volume Weighted Average Market Price ("VWAMP") of BHS Shares up to and including 21 April 2015, being the Latest Practicable Date prior to the announcement of the Proposals on 29 April 2015 ("LPD"). 2. Justifications for the Rights Issue price of RM0.42, including justifications for the discount to the five (5)-day VWAMP of BHS Shares of RM0.63. The Board is of the view that this discount will provide the existing shareholders with an attractive opportunity to further increase their equity participation in the Company at a discount to the prevailing market price of BHS Shares. 3. To quantify the theoretical ex-rights price based on the five (5)-day VWAMP of BHS Shares up to and including the latest practicable date. The theoretical ex-rights price based on the five (5)-day VWAMP of BHS Shares up to and including the LPD is RM0.58. 4. To state the expected paper production capacity and expected paper production output of the machineries and equipment to be purchased. The expected paper production capacity and production output of the first plant to be commissioned by BHS Group is 10,000 metric tons of wood free paper. 5. To also state the expected % of paper produced to be consumed by BHS. BHS Group used about 9,000 metric tons of wood free papers in the FYE 30 June 2014. It is expected that the Group would consume at least 60% of the wood free paper to be produced. 6. To elaborate briefly on the arrangements pursuant to the Master License Agreement which allow BHS to market the PRC RBMP Technology and generate additional income including royalty income. The Master Licence Agreement confers BHS Group the rights to manufacture, sale and otherwise deal with the renewable paper pulp products generated from EFB to be made specifically into wood free pulp and paper in accordance with the patents’ specifications using the PRC RBMP Technology. BHS Group would also be able to sub-licence the technology to its clients. This would mean that BHS is able to derive income from the sale of production lines using the PRC RBMP Technology which includes design, manufacture, fabricate and commission of plant and machinery. In addition, the Master Licence Agreement enables BHS Group to receive royalty income and consultancy income from sub-licensees. 7. To incorporate further description of the pulp and paper industry. The pulp and paper industry manufactures one of the most essential materials that are widely used in applications across almost all industry sectors, such as newsprint, industrial brown paper, writing/ printing paper, joss paper, toilet/ tissue paper, resin impregnated paper, and coated paper. On the 2015 outlook for the global market, the pulp demand should increase three percent (3%) with a weak first (1st) half and stronger second (2nd) half. A stronger US dollar will keep downwards pressure on pulp prices; it is expected that the prices are eroded in the early months of 2015 but to rebound after that. (Source: PaperWeek Access) 8. To state the effects of the Proposed Diversification on the earnings per share for the financial year ending 30 June 2016. Barring any unforeseen circumstances and subject to all required approvals being obtained, the Proposed Rights Issue with Warrants is expected to be completed by the second (2nd) half of calendar year 2015. Within twenty-four (24) months from the date of receipt of the Rights Shares proceeds, BHS shall utilise the proceeds raised for the acquisition of land and purchase of machineries and equipment and other ancillary facilities for the purpose of the Proposed Diversification. As such, the Proposed Diversification is not expected to have any material effect on the earnings of BHS Group for FYE 30 June 2016. This announcement is dated 7 May 2015. |
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Announcement Info
| Company Name | BHS INDUSTRIES BERHAD |
| Stock Name | BHS |
| Date Announced | 07 May 2015 |
| Category | General Announcement for PLC |
| Reference Number | GA1-07052015-00035 |