KUALA LUMPUR (Dec 29): Boustead Heavy Industries Corp Bhd (BHIC) has received the nod from shareholders to proceed with a debt settlement proposal totalling RM417 million.
BHIC announced that 99.92% of shareholders voted in favour of all resolutions presented at Friday's extraordinary general meeting, including the debt settlement plan with three lenders and its 64.99% parent Boustead Holdings Bhd (BHB).
"Other resolutions include amending the company’s constitution to facilitate the issuance of new conventional and Islamic redeemable convertible preference shares (RCPS) to the lenders and BHB as part of the debt settlement," BHIC said in a statement on Friday.
On Dec 6, BHIC proposed a partial debt settlement with three banks totalling RM183.26 million and the full settlement of its RM234 million debt with BHB. The payment is scheduled to be made by the agreed-upon cut-off date of Dec 31.
The partial debt settlement with Affin Bank Bhd, MBSB Bank Bhd, and AmBank Islamic Bhd will involve a combination of cash and the issuance of new ordinary shares and "Class A" redeemable convertible preference shares, both conventional (RCPS A) and Islamic (RCPS-i A), at a price of 57 sen per share.
Simultaneously, the RM234 million debt with BHB will be settled through the issuance of new BHIC shares, "Class B" redeemable convertible preference shares (RCPS B), and "Class C" redeemable preference shares (RPS C), also at 57 sen per share.
The ordinary shares issuance will see BHB’s stake in BHIC raised to 72.38%, from 64.99% currently. Meanwhile, AmBank Islamic will hold a 4.96% stake in the shipbuilder, followed by MBSB (4.92%) and Affin Bank (2.33%).
BHIC added that with the approval, and subject to the completion of all proposals, shareholders’ funds will increase from RM61 million to RM420 million. Net assets per share are expected to rise from 24 sen to 74 sen, and the gearing ratio will significantly reduce from 4.06 times to 0.02 times.
"The approval of the proposals by the esteemed shareholders marks a significant milestone for BHIC to strengthen its shareholders’ funds and improve cash flow moving forward," it said.
Shares in BHIC fell 1.5 sen or 3% to 48 sen at the noon break on Friday, giving the group a market capitalisation of RM120.5 million.