KUALA LUMPUR (Nov 5): Vertice Bhd has trimmed the size of its private placement as the convertible securities may not be readily exercised.

The placement will now comprise 53.2 million shares, from 72 million previously.

The company said the latest placement shares represent approximately 20% of the total number of 265.98 million issued shares as at the latest practical date (LPD), which is Oct 28.

Based on an illustrative issue price of 30 sen per placement share, the issue price of the placement shares would represent a discount of approximately 2.91% to the five-day volume-weighted average price (VWAP) of Vertice shares up to and including the LPD of 30.9 sen.

As at the LPD, the company has the following convertible securities: 36.9 million share issuance scheme (SIS) options; 60 million Warrants A and up to 500 million redeemable convertible preference shares (RCPS) that may be issued and converted into 319.65 million shares pursuant to the maximum conversion shares threshold under the issuance of RCPS.

Vertice said the lower issue size was decided upon as there are currently no outstanding SIS options and the board does not intend to grant any SIS options prior to completion of the proposed private placement which is expected to be completed by Dec 31, 2021.

“The board is of the view it is unlikely for all the Warrants A as at the LPD to be exercised into new shares prior to completion of the proposed private placement in view that Warrants A is currently out-of-the-money based on the five-day VWAP of the shares up to and including the LPD of 30.9 sen and the exercise price of the Warrants A of 50 sen; [and] there are currently no outstanding RCPS and that the company has no intention to issue any RCPS prior to completion of the proposed private placement,” said Vertice in a bourse filing on Friday.

The group intends to utilise the proceeds of up to RM15.96 million, whereby the bulk of RM15.78 million will be allocated to fund new construction projects.

The funds raised will be used towards, amongst others, payments to contractors, suppliers, consultants, material costs, earthwork, piling works, site clearing, building and external works, staff costs as well as payment to the relevant authorities, according to the group.

To recap, on Oct 29 Vertice proposed to undertake a private placement of up to 72 million shares to third-party investors and at an issue price to be determined later.

The company said the placement shares represent approximately 27.07% of the total number of 265.98 million issued shares as at LPD and about 10.55% of the total number of 682.53 million enlarged issued shares, after taking into account the full exercise and conversion of the convertible securities.

Vertice closed down half a sen or 1.64% at 30 sen, giving it a market capitalisation of RM78.51 million.

The stock has climbed 30% from when it was trading at 23 sen on Jan 4.