Khee San Launches Rights Issue as Key Step in Regularisation Plan
Confectionery manufacturer and distributor Khee San Bhd (KSB) announced significant further progress in the implementation of its regularisation plan with the official launch of a renounceable rights issue that includes warrants.
This exercise marks a crucial milestone in the group’s intense and ongoing efforts to substantially strengthen its precarious financial position and advance toward exiting its classification under the PN17 status.
The rights issue, which has received the necessary approvals from both Bursa Malaysia Securities Bhd and Khee San’s shareholders, involves the issuance of up to 960.96 million new ordinary shares.
The terms stipulate that these shares will be issued on the basis of seven rights shares for every one existing share currently held by eligible shareholders.
Importantly, this rights share issuance will be accompanied by up to 549.12 million free detachable warrants, distributed on the basis of four warrants for every seven rights shares subscribed.
The shares are offered at an issue price of RM0.10 per share.
The entitlement date, which determines which shareholders are eligible to participate in this fundraising exercise, has been officially set for November 20, 2025.
This entire exercise is designed to raise substantial capital, with Khee San expecting to secure proceeds ranging between RM65 million and RM96.1 million, the final figure of which will be contingent upon the overall subscription level achieved by investors.
The successful completion of this fundraising is paramount to the turnaround strategy.
Capital Injection to Fuel Turnaround and Settle Debts
The capital proceeds anticipated from the renounceable rights issue are designated for highly specific and critical purposes, primarily focused on settling amounts owed to scheme creditors and significantly bolstering the group’s working capital requirements, forming an essential component of its comprehensive turnaround plan.
The ability to settle outstanding debts is a fundamental requirement for Khee San to demonstrate financial viability and satisfy the requirements for exiting PN17 status.
The overall regularisation plan, which received formal approval from Bursa Malaysia on August 19, 2024, is a multi-faceted strategic roadmap.
Beyond the rights issue with warrants, this plan encompasses a scheme of arrangement with creditors to restructure liabilities, a share capital reduction of RM137.52 million to clear accumulated losses and improve the balance sheet, and the eventual establishment of an employee share scheme to incentivize and retain key talent.
Bursa Malaysia has granted Khee San a definitive deadline of February 18, 2026, to fully complete all the elements outlined in this ambitious and necessary plan.
The successful execution of the rights issue and the subsequent utilization of funds for debt settlement and working capital are the most immediate and critical steps that will validate the feasibility of the entire regularisation strategy.
This commitment to a structured recovery highlights Khee San’s determination to address its financial challenges head-on and regain investor confidence through tangible action, paving the way for the venerable confectionery brand’s long-term future.
Optimism for Exiting PN17 and Building on Heritage
The management of Khee San remains strongly optimistic that the complete execution of these multifaceted initiatives will successfully position the group to exit the financially distressed PN17 classification well ahead of the February 2026 deadline.
Achieving this will allow the company to shed the negative market perception and compliance burden associated with the status, freeing up resources and managerial focus for core business growth.
Furthermore, the successful turnaround is viewed as a way for Khee San to continue building upon its deep-rooted heritage, which spans over 70 years, as a well-known and trusted Malaysian confectionery brand.
The capital injection and financial restructuring are designed to provide a stable platform from which the group can leverage its established brand equity, extensive distribution network, and popular product lines to significantly expand market share and improve profitability.
The strategic focus now shifts from merely survival to sustainable growth and operational excellence.
The employee share scheme, once implemented, is expected to further align the interests of the employees with the company’s long-term success, promoting accountability and higher productivity.
The entire plan represents a major corporate transformation, aiming not just for compliance but for renewed commercial vitality, ensuring that Khee San can effectively compete in the dynamic and increasingly competitive regional confectionery market with a much healthier financial foundation and improved corporate governance.
