GDB proposes one-for-two bonus issue [The Edge]

KUALA LUMPUR (April 12): Construction services firm GDB Holdings Bhd has proposed to undertake a bonus issue of new ordinary shares on the basis of one bonus share for every two existing GDB shares.
In a filing today, GDB said the entitlement date will be determined later.
Concurrently, GDB also proposed to undertake a bonus issue of free five-year warrants on the basis of two warrants for every five existing shares held by shareholders on the same entitlement date to be determined later.
The one-for-two bonus issue of shares will result in the issuance of 312.5 million new shares and increase the group’s share base from 625 million shares to 937.5 million.
GDB said its share capital will remain unchanged at RM62.6 million.
The firm said assuming the full exercise of warrants, the bonus issue of warrants will result in the issuance of 250 million new shares in GDB, and further increase the group’s share base to 1.19 billion.
GDB added its share capital will expand to RM197.6 million.
It explained that the indicative warrant exercise price will be 54 sen apiece, denoting a discount of approximately 33.96% based on the five-day volume weighted average market price of GDB shares up to and including the latest practicable date of April 6, 2021 of 81.77 sen per GDB share.
Hence, it said the full exercise of warrants may potentially raise up to RM135 million in proceeds within the five-year tenure for working capital purposes.
In a separate statement, GDB managing director Cheah Ham Cheia said he was optimistic of the group making encouraging headway in its current works in hand.
“Moreover, we have set a target to win RM500 million worth of new jobs in 2021 to propel the group further. Currently, our tender book stands at RM1.3 billion,” he said.
Cheah stated that the potential additional working capital from the exercise of warrants will assist the group in taking advantage of the buoyant prospects in the construction sector.

“Although Malaysia’s economic recovery is expected to be gradual, the ongoing rollout of the vaccines under the national Covid-19 immunization program is expected to help boost market sentiments.
“We believe in positioning ourselves for the long haul to capture viable opportunities in the construction sector in the near future,” said Cheah.
He said the bonus issue is intended to enable shareholders to have greater participation in GDB’s equity by holding an increased number of GDB shares, whilst maintaining their percentage of equity interest without incurring any cost.
At the midday break today, GDB rose 1.83% or 1.5 sen to 83.5 sen, valuing it at RM521.86 million.