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Moya launches one-for-two rights issue
WATER treatment company Moya Holdings Asia has launched a one-for-two rights issue.
It is proposing to issue up to 1.4 billion new rights shares at S$0.095 each, which was Moya's share price at the close of May 21.
Tamaris Infrastructure, Moya's largest shareholder with a 68.9 per cent stake, has undertaken to fully subscribe for its entitlement under the rights issue. Tamaris is controlled by Indonesian billionaire Anthony Salim.
Moya shares fell below S$0.095 on Tuesday, so it is unlikely that other shareholders would subscribe for the rights, since they can buy directly from the market at a lower price.
If no other shareholder apart from Tamaris subscribes for the right issue, Moya will raise net proceeds of S$90.7 million at the very least.
RHB analyst Jarick Seet said: "Rights are dilutive, but it's more dilutive if the shares are issued at a discount to the market price. At the current market price, majority shareholders are pumping in money at a higher level than you are (if you were to buy shares from the market)."
A bulk of net proceeds will be used repay an existing loan facility, Moya said.
The rest will be used to finance Moya's expansion through potential acquisitions, to develop BOT (Build-Operate-Transfer) projects in bulk water supply and water supply concessions in Indonesia, and for working capital.
Mr Seet added: "Moya has said that they want to raise their total capacity in Indonesia to 20,000 litres per second by the end of this year. Currently, they are at 13,985 litres per second. The only way to reach that target is through acquisitions.
"Moya is already highly geared after swallowing Aquatico so if they had taken on more debt (instead of doing a rights issue), their gearing would shoot up."