Its rights share is priced at rm1.35 per share.
The selldown may be due to institutional investors unwilling to take up the rights shares in anticipation of earnings dilution as the proposed rights issue which is undertaken together with a bonus share exercise, involves new shares which will expand Armada’s share base.
Prospects for Armada’s earnings remain bleak. Its earnings performance in the last two quarters were below expectations. Hence with the rights share issue, the EPS is expected to be diluted even more.
The rights issue price was expected to raise gross proceeds of up to rm1.997 billion.