Microlink Is Doing a Right Issue — What Should Investors Do When They Receive This Offer?
•By Mahersaham
Artikel ini juga tersedia dalam Bahasa Melayu
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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
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
Typically, the main purposes of a Rights Issue are:
• 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
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.
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.
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.
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.
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