KUALA LUMPUR (Jan 31): Power Root Bhd has proposed to issue and allot new shares in four of its subsidiaries to its existing shareholders and new subscribers in order to provide the sharing of direct risk and rewards with Power Root in driving their respective businesses.

Power Root said the subscription prices are between RM1 and HK$1 per share, adding that the total gross proceeds raised from the shares allotment of RM1.32 million will be used for working capital of the units’ day-to-day operations.

In a bourse filing today, Power Root said its subsidiaries Power Root Distributor Sdn Bhd, Alicafe Roasters Sdn Bhd, Power Root HKChina Co Ltd and Superwrapz International Sdn Bhd have entered into four subscription agreements for the issue and allotment of new shares in the respective subsidiaries to the following parties:

(a) Power Root, its managing director Wong Tak Keong and subscribers – Thoo Wee Yoong, Wong Oi Yan and Chan Kien Siong – for the proposed issue and allotment of 599,997 new shares in Power Root Distributor at an issue price of RM1 per share. Wong is also a substantial shareholder of Power Root, holding a 9.62% stake in the company;

(b) Power Root, Wong and subscriber Tan Nan Sze for the proposed issue and allotment of 99,900 new shares in Alicafe Roasters at an issue price of RM1 per share;

(c) Power Root and Wong for the proposed issue and allotment of 999,999 new shares in Power Root HK at an issue price of HK$1 per share; and

(d) Power Root, Power Root Distributor and Wong for the proposed issue and allotment of 99,900 new shares in Superwrapz at an issue price of RM1 per share.

The subscription shares will not be listed on Bursa Malaysia.

After the completion of the shares allotment, Power Root will still be the controlling shareholder in Power Root Distributor, Alicafe Roasters, Power Root HK and Superwrapz, holding 50.1%, 80%, 90% and 95% respectively.

The proposed shares allotment is subject to approvals being obtained from shareholders of Power Root at an extraordinary general meeting to be convened. 

TA Securities Holdings Bhd has been appointed as the adviser to the proposed exercise.

The proposed shares allotment is expected to be completed by the first half of this year.
 
Power Root shares closed down 16 sen or 6.99% at RM2.13 today, with 208,800 shares done, bringing a market capitalisation of RM871.36 million.