Will it be Worth Buying the RCPS?
Looks like this could be a year of cash calls.
Eye-balling many unaudited results announced lately, most seems to be on the downslide in terms of profits.
This year, we have already been informed that BJFoods is asking for additional capital due possibly to their foray into Indonesia and the need for more operating capital for running the newly acquired Starbucks franchise.
So, what is RCE asking for?
There is a bonus issue of 1:2 as well as an issue of redeemable convertible non-cumulative preference shares (RCPS) of 10 sen each, on the basis of two RCPS for every five shares held after the proposed bonus issue.
The exercise is undertaken to repay bank borrowings, working capital-related purposes and to reward its shareholders.
Total gross proceeds from the RCPS rights from the exercise is estimated to be RM178.39mil to RM182.10mil dependent on the going price of RCE after the bonus issue.
The current price of RCE is 54 sen. With the bonus issue, the possible price of each RCE share will be about 32 to 33 sen ex-all.
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