KUALA LUMPUR (Jan 13): Education technology products and services provider Eduspec Holdings Bhd has proposed to undertake a rights issue with free warrants to raise as much as RM29.9 million for the repayment of borrowings, as well as to fund its education programs and digital school solutions business.

Prior to implementing the rights issue, Eduspec plans to undertake a share consolidation of every 20 Eduspec shares into one share on a date to be determined and announced later, according to the company’s bourse filing on Friday (Jan 13).

Assuming all 275.45 million of Eduspec’s warrants are exercised into new shares, the company’s assumed share base of 3.32 billion shares will be consolidated into 166.09 million shares.

Meanwhile, based on its total issued shares of 3.05 billion shares as at Jan 6, the proposal will result in its share base being consolidated into 152.31 million shares — assuming none of the warrants is exercised.

Eduspec said the rights issue will entail the issuance of up to 996.52 million rights shares with up to 498.26 million free detachable warrants — on the basis of six rights shares with three free warrants for every one consolidated share — on an entitlement date and at an issue price to be determined later.

Based on an illustrative issue price of three sen per rights share, the rights issue is expected to raise up to RM29.9 million in proceeds.

The company has allocated RM17.3 million for the repayment of borrowings, another RM7 million to fund its STEM (science, technology, engineering and mathematics) programs and digital school solutions business, and RM4.7 million for working capital. The remaining RM900,000 has been earmarked for the estimated expenses of the proposals.

“The proposed share consolidation is part of the company’s capital management plan to improve the company’s capital structure as well as to facilitate the proposed rights issue with warrants,” Eduspec said.

Eduspec said that barring any unforeseen circumstances and subject to requisite approvals from Bursa Securities and the company’s shareholders the proposals are expected to be completed by the second quarter of 2023.

Shares in Eduspec closed half a sen or 25% lower at 1.5 sen, giving the company a market capitalisation of RM45.69 million.