KUALA LUMPUR: PDZ Holdings Bhd says its renounceable rights shares have begun trading today until Friday.
The company is issuing up to 797.75 million renounceable rights shares (PDZ-OR) at an issue price of 14 sen each.
This is sweetened with free warrants (PDZ-WC) on the basis of six rights shares together with two PDZ-WC for every one existing PDZ share held by shareholders on October 1 this year.
Hong Kong International Sdn Bhd founder Professor Liu Chien-Lung said subscribers of PDZ-OR might be able to reap profit from both the discounted offer price of PDZ ordinary shares at 14 sen each and the free warrants.
"The issue price of 14 sen per rights share represents a discount of 12 sen from PDZ's last traded price of 26 sen today.
"Thus, for every subscription of six rights share, subscriber would receive six times the discount of 12 sen, which is equivalent to 72 sen," he said in a statement.
For every subscription of six rights shares, he added, subscribers would also get two free warrants, which can be traded at their intrinsic value of 10 sen, being the difference between the share price of 26 sen and its exercise price of 16 sen.
The total value of the two warrants is 20 sen.
"Exercise price of warrant is the amount warrant holders need to pay the company in order to convert the warrant into ordinary share," Liu explained.
"For every subscription of six rights shares at 14 sen each, the total potential profit is the sum of the total 12 sen discount of the six new ordinary shares and 10 sen intrinsic value of the two free warrants. This brings the total to 92 sen or 109.52 per cent profit on an 84 sen investment for the six rights shares."
Based on PDZ's prospectus dated October 1, in order to subscribe to the rights iIssue, investors must either own PDZ shares on the ex-date of September 30 2021 or buy the traded PDZ-OR.
The prospectus also stated that all acceptance and payment can be made using physical submission of rights subscription form, electronic application via ATM and website of Public Bank Bhd and Affin Bank Bhd or Bursa Anywhere application.
The deadline for subscribers to pay for the trading rights is October 18 2021.
The new shares and free PDZ-WC are expected to be listed on November 2 2021.
A total of 1.98 million PDZ-OR changed hands throughout the first day of trading and closed at RM0.005.
The parent stock rose RM0.005 or 1.96 per cent today to RM0.260 with 3.19 million shares changing hands.