Zetrix AI offers discounted share options amid cash flow pressure and sukuk risks

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Zetrix AI offers share options

Highlights

Zetrix AI offers 788.83 million share options at 5.4 sen per share, a 28% discount to the market price, with potential proceeds of RM42.6 million.
Suspension as a JPJ agent over RM314 million in outstanding collections and the cancellation of a RM20 million dividend point to cash flow pressure despite a cash balance of RM541.6 million as at 30 June 2026.
The group faces a covenant breach on its RM2 billion sukuk following a decline in Wong's shareholding, with the risk of immediate repayment if no resolution is reached after 22 Oct.

This article was translated from the original. Read the original version by our correspondent here.

Offer details and fundraising structure

According to The Edge Malaysia, the options are being offered to eligible directors and employees of the company and its non-dormant subsidiaries at 5.4 sen per share, compared with the closing price of 7.5 sen on the offer date. The options are exercisable immediately, with a total of 788.83 million units representing a discount of around 28% to Friday's closing market price.

Managing director Wong Thean Soon received 27.5 million options, while Datuk Dr Norraesah Mohamad, Datuk Mohd Jimmy Wong Abdullah and Wong Kok Chau each received 10 million options. In total, the four directors were allocated 57.5 million options, or around 7.3% of the total offer.

If all the options are exercised through the issuance of new shares, the company could raise around RM42.6 million. Based on 7.897 billion existing shares, the new shares would represent around 9.1% of the enlarged share capital, potentially diluting existing shareholders' holdings by the same proportion.

The company did not state any performance targets or business objectives for this latest offer. This is the first share option offer since the scheme was approved in August 2020 and implemented in December that year. The scheme allows options covering up to 10% of the company's issued shares and expires on 23 Dec 2030.

Financial pressure and implications for investors

The offer comes as Zetrix AI seeks to conserve cash following unexpected operating expenses. On 19 Oct, the group withdrew its planned first interim dividend of 0.25 sen per share for the financial year ending June 2026, a move expected to save around RM20 million, despite the group having RM541.6 million in cash as at 30 June 2026.

The group also faces RM314 million in unremitted collections owed to the Road Transport Department, or JPJ. The outstanding amount led to Zetrix AI and its subsidiary, MyEG Sdn Bhd, being suspended as JPJ collection agents from 5 Oct.

Transport Minister Anthony Loke Siew Fook said the companies would not be reappointed until the outstanding collections had been paid. Any reappointment would also be subject to additional conditions, including direct payment into the government's account.

Separately, Zetrix AI is also addressing a sukuk covenant breach after Wong's shareholding fell sharply. Forced share sales following margin calls on share-backed financing facilities reduced his stake to 1.841% from nearly 30% in August, resulting in his loss of position as the group's largest shareholder.

The group had until 22 Oct to remedy the breach, which had not triggered a payment default at that point. A sukukholders' meeting held the day after the deadline failed to reach a decision, and another meeting will be scheduled.

Without a waiver, a dissolution event could be triggered, allowing the trustee to demand immediate repayment of the outstanding sukuk. The group's obligations include RM2 billion in principal and RM164.5 million in future coupon payments.

Zetrix AI shares rose 50%, or 2.5 sen, to close at 7.5 sen on Friday, giving it a market capitalisation of RM605.9 million.

In our earlier report on Zetrix AI and MyEG's suspension as collection agents JPJ, we highlighted how the failure to remit outstanding payments to JPJ affected the core business flow and added to the group's financial pressure. The article also discussed the growing reliance on the blockchain and AI segments, as well as market concerns over the RM2 billion sukuk following the reduction in TS Wong's shareholding due to margin calls.

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