It amounts to RM250 million.
DRB-Hicom Bhd, which owns a 100 per cent stake in PHB, told Bursa Malaysia that the latest proposed PHB redeemable convertible cumulative preference shares (RCCPS) to be subscribed by Minister of Finance Inc’s unit Govco Holdings Bhd would mature at the end of the 15th year of the date of issuance of the earlier RM1.25 billion tranche.
In June this year, Govco had paid RM1.25 billion in cash to subscribe to 1.25 billion new PHB RCCPS, according to a report in The Star.
Among the conditions precedent in that initial subscription agreement was that loss-making PHB must have initiated and presented a restructuring/turnaround plan to a committee formed by the government and led by the Performance Management and Delivery Unit (Pemandu), consisting of government appointees who will monitor the implementation of the national carmaker’s recovery plan.
Other requirements included that PHB get a strategic and renowned partner to enable it to become a competitive player in the international automotive industry.
According to the report, DRB-Hicom said the salient terms of the initial subscription agreement, and the subscription agreement for the 250 million RCCPS signed on Monday, were substantially the same except for certain principal terms.
The tenures of the initial subscription RCCPS, comprising 300 million PHB RCCPS, 400 million PHB RCCPS and 550 million PHB RCCPS, are seven, 10 and 15 years after the date of issuance, respectively. Therfore, the principal amount of the debt will be repaid at the end of these periods.
The tenure of the latest RCCPS, meanwhile, is 15 years from the date of issuance of the initial subscription RCCPS, with its maturity date at the end of that 15th year, said The Star report.
DRB-Hicom said the proceeds from the proposed RCCPS issuance would be used to settle outstanding balances payable to the PHB group’s creditors, vendors and/or suppliers, and for such other purpose as may be approved by the task force.
The report said that assuming the entire PHB RCCPS and the related dividend declared for the PHB RCCPS of RM724 million were converted, DRB-Hicom’s shareholdings in PHB would be diluted from 100 per cent to about 17.65 per cent.