O the amount in 2017. OCR Company raise funds

O&C Resources Berhad (“OCR” Berhad) is a public listed company which
incorporated on 28 July 1997 as an investment holding company. It was
established by Dato Tee How Cut. It manufactures and exports condoms, baby care
accessories in Malaysia, Europe and Africa. It operates through manufacturing, trading,
construction, property development, and others segments. It is located in Petaling Jaya,
Malaysia. Based on their products
brands, it named ‘Japlo’ for baby products and ‘Romantic’ and ‘Playsafe’ for
condoms.

       Based on their financial
standing, it has current assets and current liabilities with 101,481,981 and 15,940,606
in 2016. In 2017, it has current assets and current liabilities with
124,093,361 and 38,505,755. OCR Company does not have any liquidity problems in
both years and they have enough capital to pay its debts. Share capital is
increases from 57,120,200 in 2016 to 68,745,171. Under cases Borland’s
Trustee v Steel Bros & Co Ltd (1901) 1 Ch 279, it defines the share
are the interest of shareholder measured by a sum of money for purpose of liability
and interest in. It is good in their current share capital because they gain extra
capital allotted dividends to shareholders in 2017. Irredeemable convertible
preference shares are decreases from 33,070,635 in 2016 to 32,232,195 in 2017. An irredeemable preference shares defines
an investors who issued it cannot get their capital back which has no maturity period
to be redeemed. A reserve is increases from (4,627,099) in 2016 to 1,176,758 in
2017. Reserve capital is a part of uncalled capital that cannot be used by
company and it only used for backup purpose that the creditors have a guarantee
fund return when the company is winding up. This company has prepared reserve
to their creditors and they rise up the amount in 2017.    

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     OCR Company raise funds
purposely they want to develop RM204.94 million projects in KL city centre. They
plan to develop a service apartment block with an estimated gross development
value of RM204.94 million within the vicinity of the Petronas Twin Towers. Therefore,
they plan to raise through combination of fund-raising exercise internally
generated funds and bank borrowings.

    

 

     During the financial year of 2017, OCR company raised its issued
and paid-up ordinary shares from RM57,120,200 to RM68,745,171. The first way they
raising the funds are issuance of 9,317,920 new ordinary shares from the
exercise of warrants from 2011 until 2016 at the fixed price of RM0.35 per
warrant. The second way is issuance of 2,560,000 new ordinary shares from the
exercise of Share of Issuance Scheme (“SIS”) at the fixing price of RM0.33 per
share. The third way is issuance of 16,768,800 new ordinary shares from the
conversion of 16,768,800 Irredeemable Convertible Preference Shares (“ICPS”) with
combination of one ICPS and RM0.45 in cash. Additionally, they did not issue
any debentures in their company. Besides that, OCR Company also raises their
capital by borrowing from bank. They borrow long-term loans and short-term
loans to increase their funds.

      In my opinion, I mostly prefer that
issuance shares to the public is the most appropriate to company because when a
lot of shareholders invest capital to the company, the company equity will
increases. Debentures are the creditors who lend money to the company and need
to pay the debts back plus interest charges. Besides that, if the company is
out of capital, they do not need to pay the dividends to shareholders. An
issuance share is much better than debentures. Under Section 375(1), debenture
holder has the right to appoint a receiver when company has breached a
debenture instrument, then the receiver will enter and take the possession property
of company. It will destroy the company capital going to winding up and
shareholders will leave the company. As my conclusion, I will choose issuance
of shares to public to avoid the creditors have the rights to take away our
company properties and convert it into money.