Headline: “Malaysia Smelting Corporation Announces Bonus Issue, Shares to Double in Value”
Malaysia Smelting Corporation Bhd (MSC), a leading metals company, has announced plans for a bonus issue that will double the number of shares outstanding. This move is expected to have a significant impact on the company’s stock price and shareholder value.
Key Highlights:
Bonus Issue: MSC will issue 420 million new shares, on a 1-for-1 basis, to existing shareholders. 1
No Capitalization of Reserves: The bonus shares will be issued at no cost to shareholders, without any capitalization of the company’s reserves. [[2.2]]
Ranking of Bonus Shares: The new shares will rank pari passu (equally) with the existing shares, except that they will not be entitled to any dividends or distributions with record dates prior to the issuance of the bonus shares. [[2.3]]
Listing and Quotation: The bonus shares will be listed and quoted on the Main Market of Bursa Malaysia and the Main Board of the Singapore Exchange. [[2.4]]
Rationale: The bonus issue is intended to reward existing shareholders, enhance trading liquidity, and improve the affordability of MSC shares. 3
No Material Impact on Earnings: The bonus issue is not expected to have a material effect on the Group’s earnings. However, the earnings per share (EPS) will be proportionately diluted due to the increase in the number of shares outstanding. [[4.4]]
Potential Impact on Share Price: Based on the provided illustrations, the theoretical ex-bonus price (TEBP) of MSC shares is expected to be reduced by half, from the pre-bonus 5-day volume-weighted average price (VWAP) of RM2.2548 to a TEBP of RM1.1274. [[2.1]]
This adjustment in the share price is in line with the Listing Requirements, which require the adjusted share price to be at least RM0.50 based on the 3-month VWAP prior to the application date. [[2.1, *3]]
The bonus issue is a positive development for MSC shareholders, as it will increase the number of shares they hold without any additional cost, while also potentially improving the stock’s liquidity and affordability for new investors.
Disclaimer: This article is for informational purposes only and does not constitute a recommendation to buy, sell, or hold any securities of Malaysia Smelting Corporation Bhd. Investors should conduct their own research and consult with their financial advisors before making any investment decisions.
View MSC Historical chart here
