Ancom proposes to distribute dividend-in-specie of up to 18.4 million ordinary shares in Nylex (Malaysia) Berhad on the basis of 1 Nylex share for every 20 ordinary Ancom shares held and proposes a share split involving the subdivision of every 1 Ancom share into 3 Ancom shares.
Group CEO of Ancom Berhad, Mr. Lee Cheun Wei said, “The development at Ancom has been very encouraging with progress moving along very well for us on multiple fronts. Operationally, we are catching tailwinds in both our core chemical segments on the back of new products, favourable regulatory shifts, and higher commodity prices.
Ancom had in January 2022 finalised the acquisition of all assets and liabilities of Nylex for a purchase consideration of RM179.3 million which was satisfied via a combination of cash and new issuance of 31.1 million new Ancom shares. The new Ancom shares are set to be listed on 24 March 2022 which will bring the total outstanding shares of Ancom to 284.6 million. Nylex, meanwhile, is now classified as a Cash Company.
Under the Proposals, the minimum scenario assumes an enlarged Ancom capital base of 284.6 million shares post-issuance of the 31.1 million new Ancom shares for the acquisition of Nylex businesses, while the maximum scenario further assumes the resale of treasury shares, full exercise of both outstanding warrants and ESOS which would lead to an enlarged base of 367.1 million shares.
For the Proposed Dividend-in-Specie, Ancom would distribute 14.2 million Nylex shares under the minimum scenario, and up to 18.4 million Nylex shares under the maximum scenario. The former currently holds a 50.3% stake in Nylex, which is equivalent to 90.1 million Nylex shares.
“The Proposed Share Split, on the other hand, may result in improved trading liquidity of Ancom and potentially lowering the price volatility of our stock by increasing the number of shares. On top of that, the relative affordability per unit after the split could induce greater participation of a wider range of shareholders and investors as well.”
For the Proposed Share Split, Ancom’s enlarged issued share capital is set to expand to 881.4 million shares under the minimum scenario and up to 1.10 billion shares under the maximum scenario.
Mr Lee believes the group is on a strong standing now from encouraging first-half earnings for the financial period coupled with recent geopolitical events have also driven industrial chemicals prices higher, benefiting large distributors like Ancom.
