KUALA LUMPUR (Aug 19): Takaso Resources Bhd is planning a renounceable rights issue of new irredeemable convertible preference shares (ICPS) at an issue price of 5 sen each — with free warrants — to raise up to RM36.75 million, and a diversification of its business to include property development.

In a filing with Bursa Malaysia today, Takaso said the proposed ICPS involves the issuance of up to 735.07 million new ICPS, on the basis of three ICPS for every one existing Takaso share held.

The ICPS issuance also comes with up to 73.51 million free detachable warrants with an exercise price of 50 sen each, on the basis of one warrant for every ten ICPS subscribed at an entitlement date to be determined later.

The group is presently involved in the manufacturing of rubber products and baby products, and had recently diversified into construction.

“The board expects the property development business to potentially contribute at least 25% to the future net profits of the group and/or diversion of 25% or more of the group’s net assets,” read the group’s announcement.

The proceeds from the proposed rights issue of ICPS with warrants, will be utilised for construction works and property development.

Takaso is also proposing to increase its authorised share capital from RM100 million, comprising 400 million Takaso shares; to RM500 million, comprising 1.6 billion Takaso shares and 2 billion ICPS.

The group is also proposing amendments to its Memorandum and Articles of Association to facilitate the issuance of the ICPS, pursuant to the proposed rights issue of ICPS with warrants, and the proposed increase in authorised share capital.

Takaso's (fundamental: 1.65; valuation:0) shares closed down 2 sen or 3.64% today to 53 sen, giving it a market capitalisation of RM108.46 million.

(Note: The Edge Research’s fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)