Posted on 15 Oct 2015
The company now has up to Nov 30 to submit a plan, failing which the company would be suspended from trading and subsequently delisted from the stock exchange. The company also faces a delisting should it not have the plan approved by the regulators, or should it fail to implement the plan within a stipulated time frame, including an extension of time.
The company slipped into Practice Note 17 (PN17) category, which denotes financially troubled firms, on Nov 26, 2013.
Perwaja had entered into a memorandum of agreement (MoA) with China’s Zhiyuan Investment Group Co Ltd in February to explore the possibility of the latter participating in Perwaja, either through a business co-operation model to revive the local steel maker, and to transform or operate the Kemaman plant into a profitable metal-steel-related manufacturing facility.
Subsequently, an agreement was met, where Zhiyuan would inject RM1.8bil into Perwaja under a corporate exercise that would see the Chinese firm emerging as a major shareholder of the ailing company.
The entry of Zhiyuan, a diversified company involved in chemicals, minerals construction materials and logistics, among others, forms the core of the regularisation and revitalisation scheme for Perwaja.
Perwaja had entered into the MoA because of its PN17 status. The regularisation plan hinged on the tie-up and investment from Zhiyuan.
Under the corporate exercise, Zhiyuan will subscribe for Perwaja’s entire proposed special issue of shares amounting to RM1.7bil, and provide an irrevocable written undertaking to Perwaja to subscribe for its entitlement of up to RM100mil under a proposed rights issue. The RM1.8bil capital injection will be split into four tranches, whereby in the first tranche Zhiyuan would be injecting RM600mil for the proposed special and rights issues. Subsequently, a total of RM400mil each will be injected in the second, third and fourth tranches.
The capital injection in the first tranche will see Zhiyuan emerging as a major shareholder in Perwaja with a 37% stake. Zhiyuan’s shareholding will eventually increase to 64% upon the full completion of the RM1.8bil injection. The Chinese firm will be seeking an exemption from the regulator from undertaking a mandatory takeover for the remaining shares in Perwaja.
Perwaja has total debts of some RM2.2bil.
