CEO Morning Brief

MCE Proposes 1-for-1 Bonus Share, Free Warrants

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Publish date: Wed, 11 Oct 2023, 08:49 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (Oct 10): MCE Holdings Bhd, whose share price has jumped this year, has proposed to undertake a bonus issuance of 61.78 million shares on the basis of one bonus share for every one existing MCE share held at an entitlement date to be fixed, followed by the issuance of the same number of free warrants on the basis of one warrant for every two existing MCE shares held, to reward its shareholders.

In a bourse filing on Tuesday, the original equipment manufacturer (OEM) for the automotive sector said the entitlement date of the bonus issue and free warrants will be determined and announced at a later date, adding there will be an adjustment to its share price after the completion of the bonus share and warrant issuance.

For illustration purposes, based on the five-day volume weighted average market price (VWAMP) of MCE shares up to the latest practicable date (LPD, as at Oct 9) of RM1.6923, the theoretical ex-bonus share price will be approximately 84.62 sen, the group said.

As for the bonus warrants, which will have a five-year tenure, the group has fixed the exercise price of the warrants at 80 sen apiece, which represents a discount of 5.46% to the theoretical ex-bonus share price of MCE shares of 84.62 sen.

As at LPD, the group's total issued share capital stood at RM64.09 million, comprising 61.78 million shares. Assuming the proposed bonus issue has been completed, the group’s enlarged share base will be 123.56 million shares.

And assuming the full exercise of the warrants later — from which the group could raise RM49.42 million that it plans to use for working capital — the group's share capital will increase to RM113.51 million, comprising 185.34 million shares.

Subject to all required approvals being obtained, the proposals are expected to be completed by the first quarter of 2024.

MCE shares shot up above RM2 and hit a multi-year high of RM2.13 in April this year.

On Tuesday, MCE shares closed unchanged at RM1.71, bringing the group a market capitalisation of RM106 million. The stock has climbed 72% over the past year.

Source: TheEdge - 11 Oct 2023

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