EG Industries Berhad (EG Industries) has proposed a bonus issue of 225.1 million free five-year warrants on the basis of one warrant for every two existing shares held by the entitled shareholders on the entitlement date.
The electronic manufacturing services provider said the proposed free warrants exercise shall be subject to shareholders’ approval at the upcoming extraordinary general meeting.
The gross proceeds raised from the proposed exercise will be utilised as working capital to fund the group’s day-to-day operations to fulfil the robust demand for high-performance processors used in 5G wireless networks, and to bring down the bank borrowings.
“Subject to determination of the exercise price, the gross proceeds will amount to RM405.19 million, based on an illustrative exercise price of RM1.80,” the group said.
It added that the exercise price of the warrants shall be determined and fixed by the board and announced later, after it obtained the relevant approvals but before the announcement of the entitlement date.
The proposed free warrants exercise is expected to be completed in the fourth quarter of 2023.
Its chief executive officer and executive director Datuk Alex Kang said the exercise was made after the group has tripled its net profit to a record high of RM38.4 million in the financial year ended June 30, 2023 from RM10.8mil in the previous year.
The increase were from a favourable product mix of consumer electronics, 5G wireless access, and photonics modular related products.
“The corporate exercise will raise the funds needed to capture the accelerated growth in the coming years as we increase our involvement in upstream activities in collaboration with our network of global clients,” said Kang.
The exercise price of the warrants shall be determined and fixed by the board and announced later, after obtaining the relevant approvals but before the announcement of the entitlement date.
