KUCHING: Pansar Bhd’s issued share capital will balloon up to 693 million shares if its shareholders give their green light to the company’s proposed bonus issue during an extraordinary general meeting (EGM) on April 22 in Sibu.
Pansar, controlled by the Tai family, has proposed a bonus issue of up to 231 million new ordinary shares on the basis of one bonus share for every two existing shares held on an entitlement date to be determined later.
Pansar currently has 308 million shares, including 2,682,100 treasury shares. The Tai family owns 201 million shares or 65.83 percent equity interest in the company.
Under the minimum scenario, the issued share capital will increase to 462 million shares assuming that none of the outstanding company warrants totaling 154 million warrants is exercised. The exercise price is 95 sen per warrant.
If the warrants are fully exercised, the company’s enlarged issued share capital will be raised to 693 million units.
The 154 million warrants were issued for free (as bonus) to shareholders on the basis of one warrant for every two existing ordinary shares in June-2018. The warrants will expire on June 6, 2023.
In a circular to shareholders in relation to the proposed bonus issue, Pansar managing director Datuk Tai Hee said the bonus shares would be issued as fully paid, at nil consideration and without capitalisation of the company’s reserves.
He said with the Companies Act 2016 which came into effect on Jan 31, 2017, the concept of par value for shares of Malaysian companies had been abolished, hence there is no such requirement and stipulation that cash consideration must be paid or be transferred in connection with new issuance of shares.
As a result, Tai explained that a bonus issue could now be undertaken either:
(i) by way of capitalisation of the retained earnings/accumulated profits of a company;
(ii) by way of capitalisation from the amount standing to the credit of the share premium account or capital redemption reserves of a company, and
(iii) without capitalisation, where a company may issue and allot bonus shares at nil consideration (in a manner akin to a subdivision of shares).
Tai said the Pansar board of directors had resolved to implement the proposed bonus issue without capitalisation from the company’s reserves and that the bonus shares shall be issued as fully paid shares at nil consideration.
“As the proposed bonus issue of shares is undertaken without capitalisation from the company’s reserves, it allows the board to preserve the company’s reserves available for distribution with the aim to ensure that the company has sufficient reserves available for distribution to facilitate any future dividend payments,” he added.
As at March 31, 2018, Pansar had retained profits of RM142.85 million. On the rationale for the proposed bonus issue, Tai said the exercise would potentially result in an improved trading liquidity of Pansar shares on Bursa Securities, without affecting the size of the company’s market capitalisation.
In addition, it would encourage greater participation by investors as well as potentially broadening the company’s shareholder base.
Tai said the board has recommended shareholders to vote in favour of the proposed bonus issue at the forthcoming EGM.
If approved, the company expects the bonus shares to be listed on Bursa next month.
Pansar has six business segments – marine and industrial, building products, agro engineering, electrical & office automation, heavy equipment as well as mechanical & electrical.
