The rights issue will result in 2,500,000 new ordinary shares being issued at a price of K10,000 each, a discount of about 20 percent to the current price of FMI shares, the statement said.
The shares will be open for subscription by shareholders in priority from November 25 to January 8, it said, adding that shareholders would be entitled to subscribe to one new share for every six existing shares held, and would also be entitled to apply for extra shares.
Unsubscribed shares may be open for application to the public on January 9, it said. The allotment of the new shares is expected to take place a week after the subscription closes and will entitle holders to any dividends for the 2013-2014 financial year.
The new shares are only available to Myanmar nationals.
“Our economy is on the cusp of a significant boom, a period of exponential growth that may not be easily repeated in the decades to come,” the statement quoted FMI chairman U Theim Wai as saying.
“It is therefore our corporate strategy to proactively expand our existing operations and initiate start-ups in the next two to three years. To do so, we will need to strengthen our capital base and top up our war chest very quickly,” U Theim Wai said.
The statement said the placement of 2,500,000 new shares would be fully underwritten by SPA Myanmar for a fee of 2 percent.
“The assurance of capital ensures that our strategic corporate plans can be implemented on a timely basis”, said U Theim Wai, who is also the chairman of SPA Myanmar.
Capital raised from the rights issue will finance company projects, including the Thilawa Special Economic Zone, in which FMI is committed to subscribing 5 percent to 9 percent of the Myanmar consortium. The Thilawa SEZ is a 2,400 hectare site next to the Thilawa port in Thanlyin.
Other projects include expanding existing operations in the tourism and automobile divisions, building up FMI Air following the granting of a temporary air operator's certificate, and additional investment in Meeyahta International Hotel Ltd., a 10-acre mixed use development in downtown Yangon comprising two hotels, two office towers, a retail shopping mall, a serviced apartment and a high-end condominium.
The funds will also be used to help increase the paid-up capital of Yoma Bank by an extra 10 billion kyat to 15 billion kyat during the next year, the statement said.
FMI owns 35.6 percent of Yoma Bank and intends to contribute between 3 billion kyat to 5 billion kyat, it said.