KUALA LUMPUR (Feb 14): Healthcare service provider Cengild Medical Bhd has proposed to undertake a special issue of new shares to Bumiputera investors, to comply with the Bumiputera equity condition to be listed on the ACE Market.

It plans to issue 118 million new shares, or 12.6% of its enlarged issued share base of 936.8 million, at an issue price to be announced later.

At an illustrative price of 45 sen — a 9.09% discount to the five-day volume-weighted average market price of Cengild shares up to and including Jan 31, 2023, of 49.5 sen — the special issue is expected to raise RM53.1 million.

Cengild’s special issue comes after the Securities Commission Malaysia (SC) on Jan 17 approved the company’s resultant equity structure, pursuant to the proposed special issue under the equity requirement for public listed companies.

The group was listed on the ACE Market back in April last year, on condition that it will allocate 12.5% of its enlarged number of issued shares to Bumiputera investors within one year after achieving the profit requirement for companies seeking listing on the Main Market of Bursa Malaysia.

Of the proceeds, Cengild said RM51.94 million has been earmarked for the healthcare services provider's working capital, while the remaining RM1.16 million is to be utilised for the exercise’s estimated expenses.

The shares will be issued to Bumiputera investors to be identified, and approved by the Ministry of International Trade and Industry.

“After Cengild Medical’s listing on the ACE Market… the company has achieved the profit requirement based on its audited profit after tax of RM9.39 million for the financial year ended June 30, 2022 (FY2022),” Cengild said in a filing, adding that it is thus required to comply with the Bumiputera equity condition by June 30, 2023.

Barring any unforeseen circumstances, the special issue is expected to be completed within six months from Bursa Securities’ approval for the listing and quotation of the new shares.

Hong Leong Investment Bank Bhd has been appointed as the special issue’s principal adviser and placement agent.

According to Cengild’s unaudited financial results for the first quarter ended Sept 30, 2022 (1QFY2023), the company’s net profit jumped 163% to RM3.62 million from RM1.37 million a year earlier, as revenue climbed 20.02% to RM17.62 million versus RM14.68 million.

The higher revenue was attributed to the higher number of patients, number of endoscopic procedures and surgeries performed in 1QFY2023 as compared to a year prior.

Shares in Cengild Medical closed one sen or 2.06% higher at 49.5 sen, giving the company a market capitalisation of RM405.31 million.