1. INTRODUCTION
On behalf of the Board of Directors of FCB ("Board"), Hwang-DBS Investment Bank Berhad (formerly known as Hwang-DBS Securities Berhad) ("Hwang-DBS") wishes to announce that the Company proposes to issue up to 47,500,000 new ordinary shares of RM0.10 each in FCB ("Placement Shares") through a private placement exercise ("Proposed Private Placement").
2. THE PROPOSED PRIVATE PLACEMENT
As at 23 March 2007, the Company has an issued and paid-up share capital of RM47,500,000 comprising 475,000,000 ordinary shares of RM0.10 each ("FCB Shares").
Subject to prevailing market conditions, the Proposed Private Placement may be implemented in multiple tranches. The Placement Shares shall be placed out to placees in accordance with Guidance Note 8C of the Policies and Guidelines on Issue/ Offer of Securities issued by the Securities Commission ("SC") ("SC Guidelines"). In any case, the Placement Shares will not be placed with the following parties:
(i) Directors, substantial shareholders or the chief executive officer of FCB (hereinafter referred to as "interested persons"), whether in their own names or through nominees;
(ii) persons connected to the interested persons mentioned in sub-paragraph (i) above;
(iii) nominee companies, unless the names of the ultimate beneficiaries are disclosed; or
(iv) parties connected to the placement agent, unless such parties satisfy certain criteria stipulated under Guidance Note 8C of the SC Guidelines.
Pricing of the Placement Shares
The issue price of each tranche of the Placement Shares shall be determined and fixed by the Board after receiving the relevant approvals for the Proposed Private Placement and after taking into consideration, inter-alia, prevailing market conditions, in the following manner:
(i) at a discount of not more than 10% over the five (5)-day weighted average market price of FCB Shares immediately preceding the price-fixing date(s); or
(ii) the par value of FCB Shares of RM0.10 each,
whichever is higher.
For illustrative purposes, assuming an indicative issue price of RM0.67 per Placement Share based on a discount of approximately 9.5% to the five (5)-day weighted average market price up to 30 March 2007 of RM0.74, the Proposed Private Placement is expected to raise gross proceeds of up to approximately RM31.8 million. The utilisation of proceeds raised from the Proposed Private Placement is as set out in Table 1.
Ranking of the Placement Shares
The Placement Shares shall, upon issue and allotment, rank pari passu in all respects with the existing FCB Shares, except that they shall not be entitled to any dividends, rights, allotments and/or any other distributions that may be declared by the Company, the entitlement date of which is prior to the date of allotment of each respective tranche of the Placement Shares.
An application will be made to Bursa Malaysia Securities Berhad ("Bursa Securities") for the listing of and quotation for the Placement Shares at a later date.
3. RATIONALE AND UTILISATION OF PROCEEDS
The Proposed Private Placement provides an avenue for the Company to tap into the capital market to fund viable investments that may arise in the future and raise additional working capital to finance its growing operations without the need to raise funds via borrowings. Additionally, the Proposed Private Placement also allows the Company to raise funds expeditiously without overly imposing on its shareholders in terms of their financial commitment with an added advantage of further strengthening the Company's capital base in view of the Group's growing business.
Details of the utilisation of proceeds are set out in Table 1 below. The Directors of FCB expect that the proceeds arising from the Proposed Private Placement will be fully utilised within 18 months from the date of listing of the final tranche of Placement Shares.
4. FINANCIAL EFFECTS
4.1 Share Capital
The effect of the Proposed Private Placement on the issued and paid-up share capital of the Company is shown in Table 2 below.
4.2 Earnings
The Proposed Private Placement is not expected to have a material effect on the earnings and earnings per share of the FCB Group for its current financial year ending 31 December 2007.
However, the Proposed Private Placement is expected to result in interest savings in the longer term as the Group will be able to utilise the proceeds from the Proposed Private Placement to fund future investments and finance working capital requirements of the Group which would otherwise have to be financed via borrowings .
4.3 Net assets and gearing
The effect of the Proposed Private Placement on the consolidated net assets and gearing of FCB based on its audited proforma consolidated financial statements as at 31 December 2005 is shown inTable 3 below.
4.4 Shareholding structure
The effect of the Proposed Private Placement on the substantial shareholding structure of the Company based on the Register of Substantial Shareholders as at 23 March 2007 is shown in Table 4.
4.5 Dividends
The Proposed Private Placement is not expected to have any material effect on the dividend policy of FCB.
The Board did not recommend any dividend for the financial year ended 31 December 2006. The declaration of future dividends by the Board, if any, will be dependent upon, among others, the profitability, cash flow position and funding requirements of FCB.
5. CONDITIONS OF THE PROPOSED PRIVATE PLACEMENT
The Proposed Private Placement is conditional upon approvals being obtained from the following:
(i) SC (Securities Issues Department and Equity Compliance Unit);
(ii) Bursa Securities for the listing of and quotation for the Placement Shares on the MESDAQ Market of Bursa Securities; and
(iii) any other relevant authorities, if required.
Approval had been obtained from the shareholders of FCB at an Extraordinary General Meeting held on 6 February 2007 for the issuance and allotment of new FCB Shares not exceeding 10% of the total issued and paid-up share capital of FCB in accordance with Section 132D of the Companies Act, 1965. Therefore, the Proposed Private Placement does not require another specific approval from the shareholders of FCB.
6. INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSON CONNECTED TO THEM
None of the Directors, major shareholders of the Company and/or persons connected to them has any interest, directly or indirectly, in the Proposed Private Placement.
7. ADVISER AND SPONSOR
Hwang-DBS has been appointed by FCB, who is the Sponsor of the Company, to act as Adviser and Placement Agent in relation to the Proposed Private Placement.
8. DIRECTORS' STATEMENT
The Directors of FCB, having taken into consideration all aspects of the Proposed Private Placement, are of the opinion that the Proposed Private Placement is in the best interest of the Company.
9. DEPARTURE FROM THE SC'S GUIDELINES
To the best knowledge of the Board of Directors of FCB, the Proposed Private Placement has not departed from the applicable SC's Guidelines, namely, Guidance Note 8C.
10. APPLICATION TO AUTHORITIES
The relevant applications to the regulatory authorities in relation to the Proposed Private Placement will be made within two (2) months from the date of this announcement.
This announcement is dated 2 April 2007.
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