V.S. Industry proposes bonus warrants to reward shareholders

by **Cals** Tue 20 Oct 2015, 00:15

V.S. Industry proposes bonus warrants to reward shareholders

By Gho Chee Yuan / theedgemarkets.com | October 19, 2015 : 7:52 PM MYT

KUALA LUMPUR (Oct 19): [size=16]V.S. Industry Bhd ([You must be registered and logged in to see this image.] Valuation: 1.70, Fundamental: 1.30) is proposing a bonus issue of up to 290.77 million free warrants, on the basis of one bonus warrant for every four existing shares held.

In a filing with Bursa Malaysia today, the Johor-based electronic manufacturing services (EMS) provider said the proposed corporate exercise is to reward its shareholders.

It said the exercise will also increase shareholders' equity participation by exercising their bonus warrants at a pre-determined exercise price, during the tenure of the bonus warrants.

"The proposed bonus warrants will also strengthen the capital base of the company and potentially provide additional funds to the group, if the bonus warrants are exercised," it added.

As at the latest practicable date (LPD) on Oct 6, VS Industry's total issued capital stood at RM231.14 million, comprising 1.16 billion shares (excluding if 5.75 million treasury shares).

It noted its total issued and paid up capital will enlarge to RM290.77 million, comprising of 1.45 billion shares, upon completion of the exercise.

VS Industry said as at LPD, the company has 7.37 million options under existing employees' share option scheme (ESOS), which have been granted but unexercised.

It added that the exercise will not raise any funds upon issuance.

For illustrative purposes, it said assuming all the bonus warrants are fully exercised at the exercise price of RM1.65 each, the proceeds to be potentially raised is approximately RM479.76 million, and these proceeds shall be utilised for working capital purposes.

VS Industry expects to complete the proposed exercise by the first quarter of 2016.

Shares in VS Industry closed 11 sen or 7.8% higher at RM1.52 today, bringing it's market capitalisation to RM1.77 billion.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)

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