Mega First Corporation Berhad Proposes Renewal of Share Buy-Back Authority: Key Details for Investors

Mega First Corporation Berhad (MFCB) has released a comprehensive statement to shareholders regarding the proposed renewal of the authority for the company to buy back up to 10% of its own shares. This resolution is set to be tabled at the upcoming 60^th Annual General Meeting (AGM) on 21 May 2026.

Key Points of the Proposed Share Buy-Back Renewal

• Renewal of Existing Authority: The proposed renewal will allow MFCB to repurchase up to 10% of its total issued shares as quoted on Bursa Malaysia Securities Berhad at the point of purchase.
• Previous Buy-Back Activity: As of 31 March 2026, MFCB had purchased a total of 46,147,800 shares from the open market, which are currently held as treasury shares.
• Financial Provision: The company has allocated up to approximately RM 733.798 million (retained profits as of 31 December 2025) for the buy-back programme.
• Funding Sources: The buy-back can be funded from internally generated funds and/or external borrowings, with the proportion to be determined based on circumstances at the time of purchase.
• Treatment of Purchased Shares: Shares bought back may be cancelled or retained as treasury shares (potentially to be resold, distributed as share dividends, transferred for employee share schemes, or used for other prescribed purposes).

Potential Advantages and Disadvantages for Shareholders

Advantages

• Efficient use of surplus financial resources for value-adding activities.
• Potential to stabilize supply and demand of shares and support market price.
• Reduction in outstanding shares could enhance earnings per share (EPS) and make the stock more attractive to investors.

Disadvantages

• Reduction in financial resources could mean missed investment opportunities.
• Lower retained profits could affect future dividend distributions.
• Possible impact on working capital and cash flows, especially if borrowings are used.

Detailed Effects of the Buy-Back

• Share Capital: If the maximum 10% is purchased and cancelled, the issued shares would decrease from 988,352,102 to 889,516,892. If all purchased shares are retained as treasury shares, there will be no reduction in issued capital.
• Earnings Per Share (EPS): Potential to increase EPS if cancelled, provided buy-back costs are lower than pre-buy-back EPS. If resold, the impact depends on resale price and interest savings.
• Net Assets: Buying back shares above the company’s net asset per share will reduce net assets per share, and vice versa.
• Dividends: Retaining purchased shares as treasury shares could increase the rate of dividends per share, as there would be fewer shares entitled to dividends.
• Working Capital: The buy-back will reduce working capital in proportion to the buy-back price and the number of shares purchased.

Shareholdings of Directors and Substantial Shareholders

The report details the pro forma effects of the buy-back on the shareholdings of directors and substantial shareholders. Notably:

• Goh Nan Kioh, Executive Chairman, with direct and indirect shareholdings, could see his percentage ownership rise (from 36.21% to 38.35%) if the buy-back is executed and shares are cancelled.
• Other major shareholders, including Rubber Thread Industries (M) Sdn Berhad, Keen Capital Investments Limited, Camasia Limited, and Employees Provident Fund Board, will also see proportional increases in their percentage shareholdings.

Recent Buy-Back Activity and Historical Price Trends

• Over the past 12 months, MFCB has repurchased shares at prices ranging from RM 3.12 to RM 3.67 per share.
• The last transacted market price as at 31 March 2026 was RM 2.86.
• The public shareholding spread as at 31 March 2026 was 47.38%, well above the 25% minimum required by Bursa Malaysia.

Regulatory and Takeover Code Implications

• Under the Malaysian Code on Takeovers and Mergers, if a shareholder (and persons acting in concert) holding over 33% but less than 50% increases their holding by 2% or more within 6 months due to the buy-back, they must undertake a mandatory general offer to acquire all remaining shares.
• Currently, Goh Nan Kioh and his PACs’ holdings are in this range. The board will monitor and ensure that the buy-back does not trigger this requirement. If it does, a waiver from the Securities Commission Malaysia may be sought.

What Shareholders Need to Know: Price-Sensitive Highlights

• The buy-back could reduce the number of shares in circulation, likely increasing the EPS and potentially supporting or increasing the share price if market conditions are favorable.
• Major shareholders’ percentage ownership will rise, increasing their influence over the company.
• If the buy-back triggers a mandatory general offer, it could result in significant corporate actions and potential changes in control, which would be highly price sensitive.
• Reduction in working capital and potential use of borrowings could affect the company’s liquidity and financial flexibility.

Board Recommendation

The Board of Directors, after careful consideration, recommends that shareholders vote in favor of the proposed renewal at the upcoming AGM, considering it to be in the best interests of the company and its shareholders.

Additional Information

• The directors accept full responsibility for the accuracy of this statement and confirm that there are no omissions that would make the statement misleading.
• Shareholders can inspect the company’s constitution and audited financial statements for 2024 and 2025 at the registered office during normal business hours prior to the AGM.

Conclusion

The proposed renewal of the share buy-back authority is a significant corporate action that could impact Mega First Corporation Berhad’s share price, shareholder value, and control structure. All shareholders are urged to review the proposal carefully and participate in the upcoming AGM.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Shareholders and investors should consult their own professional advisers before making any investment decisions. The company’s future performance and share price may be influenced by a variety of factors, including but not limited to those discussed above.

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