Microlink Is Doing a Right Issue — What Should Investors Do When They Receive This Offer?
Microlink is currently conducting a Rights Issue, which means they are offering new shares to existing shareholders.
In this case:
• They are offering up to 536,198,080 new shares
• At a price of RM0.16 per share
• Plus free warrants — 1 warrant for every 2 existing shares held
• These warrants are detachable, meaning they can be traded separately once issued
The Rights Issue Is Renounceable
This means:
• If you, as a shareholder, do not wish to take up the offer, you can sell your rights to someone else on the open market
• So it is not compulsory to subscribe, but you do have the option to sell your rights
Why Do Companies Do This?
Typically, the main purposes of a Rights Issue are:
- To raise additional capital without taking on debt
- To fund new projects, investments, or repay existing borrowings
- To give existing shareholders the opportunity to maintain their shareholding without dilution
Important Dates
- Deadline to participate: 30 June 2025 at 5.00 PM
• Deadline for rights trading: 7 July 2025
• Deadline for payment and share allotment: 15 July 2025
Important Notes
• If you do not take up the offer to subscribe, your shareholding may be diluted — meaning your percentage ownership becomes smaller
• The free warrants can be attractive if the share price rises, as warrants can typically be converted into shares at a fixed, lower price
Related Articles from Mahersaham
- Chronology of a Right Issue — What Actually Happens
A basic explanation of what a rights issue is in the context of Bursa Malaysia listed companies
- Essential Things to Know About Right Issues
Important insights including the purpose, process, risks, and implications for investors
- e-Rights on Bursa Anywhere
How to subscribe to rights issues electronically through the Bursa Anywhere platform
Frequently Asked Questions (FAQ)
What is a right issue and how does it work?
A right issue is an offer by a company to its existing shareholders to purchase new shares at a specific price (usually lower than the market price). It aims to raise additional capital for the company. As an investor, you have the right but are not obligated to subscribe.
What should I do if I receive a right issue offer?
You need to assess whether the offer price is worthwhile compared to the current market price, review the company''s purpose for raising funds, and decide whether to subscribe, sell your rights on the market, or let them lapse.
How do I subscribe to a right issue online?
You can subscribe to a right issue electronically through the Bursa Anywhere platform (e-Rights). The process is straightforward and can be done without visiting a bank counter or broker.
Does a right issue cause the share price to drop?
Yes, typically the share price will undergo an adjustment after the ex-rights date because the number of shares in circulation increases. However, this does not necessarily mean a loss if you subscribe and the company utilises the funds effectively.
Next Steps
Download our free ebook to learn the fundamentals of stock investing, including corporate actions like right issues.
Open a CDS account today and start investing in stocks on Bursa Malaysia.