SECOND board-listed Haisan Resources Bhd is planning a renounceable two-call rights issue to strengthen its financial position and expand business in a bid to reinforce its presence in the temperature-controlled logistics industry.

The company is proposing to issue up to a maximum 46.435 million new shares and 9.287 million free detachable warrants at par.

The rights and warrants will be issued on the basis of one rights share for every two existing shares held, with one free warrant for every five rights shares issued. The proposed rights will raise total gross proceeds of up to RM17.4 million, which will be used to repay bank borrowings and as working capital.

“We believe that funds raised from the proposed rights issue will enable the company to expand our current operations and enhance our existing facilities. We believe that this will assist us in strengthening our presence in the temperature-controlled logistics industry, on both the local and regional fronts,” managing director Ong Chin Yet said in a statement.

Ong said reducing the group’s bank borrowings places Haisan in a better position in terms of working capital.

Haisan currently has an issued and paid-up share capital of 88.020 million shares. Under the minimum scenario, the proposed rights issue and warrants will entail the issuance of up to 21.462 million rights shares with 4.292 million warrants.

The maximum scenario will see the issuance of 46.435 million rights shares and 9.287 million warrants. On full subscription, Haisan’s paid-up capital will increase to 162.079 million shares. The proposed issue price is RM0.50 per rights share. The first call of RM0.375 will be payable in cash while the second call of RM0.125 shall be capitalised from the group’s share premium account. The issue price of RM0.50 represents a discount of about 57 per cent to Haisan’s last transacted price of RM0.88.