KUALA LUMPUR: YB Ventures Bhd (YVB) has today proposed to undertake a bonus issue of up to 749,319,778 free warrants on the basis of one warrant for every two shares in the company.
Main Market-listed tiles manufacturer and information technology company's issued share capital as of 31 December 2021, being the latest practicable date (LPD) is RM110.75 million comprising 291,311,170 shares, out of which 808,616 are treasury shares.
Under the minimum scenario where none of the treasury shares and outstanding irredeemable convertible unsecured loan stocks (ICULS) converted, 145,251,277 warrants will be issued.
For illustration purposes and based on an indicative exercise price of RM0.40, YVB will raise gross proceeds of approximately RM58.1million and RM299.73 million respectively.
YBV executive director Datuk Au Yee Boon said the company views the exercise as an attractive proposition to reward shareholders and to have greater participation in a derivative in the company without incurring any cost.
"On the other hand, the 3-year convertible warrants, when being exercised, will provide us with additional working capital and allow the company to obtain proceeds without incurring interest expenses as compared to bank borrowings," Au said in a statement today.
On prospects, Au is confident of maintaining a profitable year for the financial year (FY21) despite the impact from the Movement Control Order (MCO) 3.0.
"Our business operation is back to its full force after all our operational workers have completed their second dose of vaccine, which is in line with the guidelines set out by the Health Ministry," Au added.
"The direction going forward for the company will be to scout for merger and acquisition (M&A) opportunities that arise from this Covid-19 pandemic.
"The low interest-rate environment and our sturdy balance sheet put us in a good position on the negotiation table with potential candidates," he said.
YVB has cash and bank balances of RM122 million, with RM21 million in other investments, and zero borrowings in its balance sheet as of September 2021.
"We hope to finalise at least one M&A deal in the first half of 2022.
"The deal will create value for our shareholders by generating sustainable cash flow to the company," Au said.