Vivocom proposes 1-for-4 bonus issue

by **Cals** Tue 12 Jul 2016, 20:54

Vivocom proposes 1-for-4 bonus issue

By Kamarul Anwar / theedgemarkets.com | July 12, 2016 : 7:49 PM MYT

KUALA LUMPUR (July 12): Vivocom Intl Holdings Bhd has proposed a one-for-four bonus issue of 870.3 million shares which would enlarge its share base to between 3.23 billion and 4.35 billion.

In a filing with Bursa Malaysia today, Vivocom — an ACE Market-listed construction player with huge support from China Railway Construction Corp Ltd (CRCC) — said it expects the exercise to be completed by the third quarter of 2016. RHB Investment Bank Bhd serves as adviser for this exercise.

Vivocom said the bonus issue lets the company reward existing shareholders and enhance its capital base.

"A bulk of these shareholders are retailers who believed in the company when we were still in our infancy and, as we grow from strength to strength, we would like to reward them with this bonus issue as only with their loyal and continued support, Vivocom can surge ahead to attain greater heights," said its executive director Choo Seng Choon.

The group said a bonus issue will also give more shares to its shareholders without increasing their equity interest, but gives potential to broaden its shareholder base and allow more investors to participate in the stock.

Vivocom said the bonus issue will also increase its issued and paid-up share capital to a level "which would be more reflective of its current scale of operations and assets employed".

As at June 20, the group has 2.59 billion shares outstanding. The bonus issue, at a one-to-four ratio, will enlarge Vivocom's share base to 3.23 billion.

However, it has three warrants, VIVOCOM-WB, VIVOCOM-WC and VIVOCOM-WD. In the case that all outstanding warrants are exercised, Vivocom's issued share capital will rise to 3.48 billion, and once the bonus shares are issued, 4.35 billion.

At the company level, Vivocom's share premium account amounted to RM63.67 million as at March 31. Under the minimum scenario, the share premium account will fall to RM16.83 million after the bonus issue is completed assuming none of the warrants were converted.

However, under the maximum scenario, the amount will be RM69.41 million if all the warrants were converted to shares.

Vivocom shares have fallen from its decade-high of 35 sen in May to close at 26 sen today, valuing the company at RM659.76 million.

The Edge weekly reported last month that its chief executive officer Datuk Seri Dr Yeoh Seong Mok, who has been instrumental in transforming Vivocom and forging ties with CRCC, may retire early.

The firm, however, said in a Bursa Malaysia filing it had neither received an official resignation letter nor any unofficial notification from Yeoh that he was going to step down, and the group has "put in place a strong and highly experienced management team which would ensure the smooth running of the group's operations".