SCIB launches rights issue, capital reduction to strengthen financial position
KUCHING (June 27): Sarawak Consolidated Industries Berhad (SCIB) has proposed a rights issue to raise up to RM53.45 million, alongside a share capital reduction to address accumulated losses and strengthen its financial footing.
In a statement yesterday, SCIB said the rights issue will involve up to 763.62 million new ordinary shares, accompanied by an equal number of free detachable warrants.
It said the offer is on the basis of one rights share for every existing SCIB share held with one free warrant for each rights share subscribed.
The indicative issue price is RM0.07 per rights share.
Executive Chairman and major shareholder Datuk Chong Loong Men has committed to subscribing to 143 million rights shares.
The group said the corporate exercise is aimed at strengthening its financial position, optimising its capital structure, and supporting future expansion.
Proceeds from the rights issue will go towards constructing a new factory, acquiring machinery, repaying part of the group's bank borrowings, meeting working capital needs, and covering expenses related to the corporate proposals.
'The fresh capital injection will reinforce SCIB's liquidity and operational capacity, particularly in its core manufacturing and EPCC (engineering, procurement, construction and commissioning) segments, as it scales participation in major infrastructure projects across East Malaysia and beyond,' the group said.
At the same time, SCIB has proposed a reduction of its issued share capital by RM110 million under Section 117 of the Companies Act 2016.
The proposed capital reduction, according to the group, will help to rationalise its financial position by cancelling part of its issued share capital that is lost or unrepresented by assets.
This move is expected to reflect the actual value of the group's assets and financial position more accurately.
Chong said the rights issue with warrants allows shareholders to take part directly in SCIB's growth path while reinforcing its capital base.
He said the capital reduction also shows the company's commitment to transparency and restoring its balance sheet strength.
'We are laying a solid foundation for long-term growth and operational scalability, especially as we align ourselves with the robust infrastructure agenda in Sarawak and the wider region.
'These corporate initiatives will allow us to be more agile financially and create sustainable value for all stakeholders,' he said.
A circular with full details will be issued to shareholders ahead of the upcoming extraordinary general meeting. corporate news Sarawak Consolidated Industries Berhad
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