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KUALA LUMPUR: GDB Holdings Bhd has proposed to undertake a bonus issue of new ordinary shares on the basis of one bonus share for every two existing GDB shares.
In a filing with Bursa Malaysia, the construction services firm said the entitlement date would be determined and announced later.
GDB has also proposed to undertake a bonus issue of free five-year warrants on the basis of two warrants for every five existing shares held by shareholders on the same entitlement date to be determined later.
“The 1-for-2 bonus issue of shares would result in the issuance of 312.5 million new shares and increase the group’s share base from 625.0 million shares to 937.5 million.
“The group’s share capital would remain unchanged at RM62.6mil,” GDB said in a separate statement.
Assuming the full exercise of warrants, GDB said the bonus issue of warrants would result in the issuance of 250.0 million new shares in GDB, and further increase the group’s share base to 1,187.5 million.
GDB’s share capital would expand to RM197.6mil.
For illustration, the indicative warrant exercise price will be 54 sen apiece, denoting a discount of approximately 33.96% based on the 5-day volume weighted average market price of GDB Shares up to and including the latest practicable date of April 6 of 81.77 sen per GDB share.
Hence, the full exercise of warrants may potentially raise up to RM135mil in proceeds within the five-year tenure for working capital purposes.
GDB has about RM2.1bil outstanding orderbook as at Dec 31, 2020.
Group managing director Cheah Ham Cheia said: “We are optimistic of making encouraging headway in our current works in hand.
“Moreover, we have set a target to win RM500mil worth of new jobs in 2021 to propel the group further. Currently, our tender book stands at RM1.3bil.”
The bonus issue of ordinary shares is intended to enable shareholders to have greater participation in GDB’s equity by holding an increased number of GDB shares, whilst maintaining their percentage of equity interest without incurring any cost.
It is also expected to further enhance the trading liquidity of GDB shares on Bursa Malaysia Securities.
Additionally, the bonus issue of free warrants would allow existing shareholders of the company to benefit from any potential capital appreciation of the warrants; and help to strengthen the company’s capital base and shareholders’ funds.
GDB remained in net cash position with zero borrowings to date.
Cheah said the potential additional working capital from the exercise of warrants would assist the group in taking advantage of the buoyant prospects in the construction sector.