KUALA LUMPUR (July 28): Small cap outfit Oversea Enterprise Bhd has proposed a private placement, followed by a rights issue, to raise funds for the expansion of its restaurant and manufacturing businesses.

Oversea Enterprise currently has an issued share capital of 884.75 million shares, inclusive of 11.7 million treasury shares, the group’s filing showed.

The plan is to issue a minimum of 261.92 million shares under the private placement, representing 30% of its enlarged share capital, to raise between RM20.04 million and RM30.32 million.

This is followed by a one-for-one rights issue, together with free detachable warrants on the basis of one warrant for every three rights shares subscribed.

Oversea Enterprise plans to procure written undertakings from shareholders to subscribe to a minimum of 166.67 million rights shares, it said.

The targeted minimum subscription underlines 14.68% of the available rights issue under the base case scenario, to raise at least RM10 million, the group said.

The group’s indicative share price for both exercises is 6 sen per share, it added.

Proceeds from the exercises, which will be anywhere between RM30.04 million and RM133.38 million, will be used to fund the expansion of Oversea Enterprise’s four new restaurants in Kuala Lumpur and Genting Highlands.

They will also be used for the expansion and upgrading of the group’s two food products manufacturing facilities in Shah Alam, and as working capital.

Oversea Enterprise said the free warrants are expected to have a three-year tenure. The group also has 436.53 million outstanding warrants expiring March 4, 2024, with an exercise price of 16 sen per share.

Shares of Oversea Enterprise closed down 1 sen or 8% at 11.5 sen today, valuing the group at RM97.83 million.