Muar Ban Lee Group Berhad Proposes Renewal of Share Buy-Back Authority: Key Insights for Investors

Muar Ban Lee Group Berhad (MBL) has issued a Statement to Shareholders detailing its proposal to renew the authority for the company to repurchase its own shares, up to ten percent (10%) of its issued share capital. The proposal will be tabled as Special Business at MBL’s upcoming Twentieth Annual General Meeting (20th AGM) scheduled for 25 May 2026 at the company’s Conference Room in Muar, Johor. This renewal is a significant corporate action that could potentially impact MBL’s share price, capital structure, and the value proposition for investors.

Key Highlights of the Share Buy-Back Proposal

• Scope of Authority: The Board seeks shareholder approval to renew the mandate to purchase up to 10% of MBL’s issued share capital at any point in time, subject to prevailing laws and regulations.
• Quantum: As of 31 March 2026, MBL’s issued share capital stood at RM75,654,557.30 comprising 248,821,800 ordinary shares. The maximum number of shares that could be bought back is 24,882,180. Should all outstanding warrants be exercised, this number could increase to 36,258,975 shares.
• Purchase and Resale Price Limitations: The buy-back price will not exceed 15% above the 5-day volume-weighted average market price (VWAP). Resale of treasury shares must be at or above the 5-day VWAP prior to resale, with a limited discount allowed under certain conditions.
• Funding: The buy-back will be financed through internally generated funds and/or borrowings. The maximum outlay will not exceed the company’s retained profits (RM17,559,961 as at 31 December 2025).
• Treatment of Purchased Shares: Shares bought back may be cancelled, held as treasury shares, resold, or distributed as share dividends, depending on the Board’s discretion and market conditions.
• Duration: The mandate, if approved, will remain in force until the next AGM, unless earlier revoked or renewed.

Potential Price-Sensitive and Shareholder-Relevant Issues

• Impact on Earnings Per Share (EPS): Buy-backs reduce the number of shares in circulation, which can increase EPS and potentially boost the share price, all else being equal.
• Market Price Stabilisation: The proposal allows MBL to counteract speculation and stabilise the market price, especially when shares are undervalued—an action that may enhance investor confidence.
• Capital Structure Flexibility: The buy-back provides the Board flexibility to optimise the company’s capital structure.
• Treasury Shares as Dividends: Treasury shares may be distributed as share dividends, providing a direct benefit to shareholders.
• Potential Disadvantages: The buy-back could reduce financial resources available for other investments or future dividends, and may lead to a reduction in net assets, especially if shares are bought back at a price above current NA per share.
• Public Shareholding Spread: The company is committed to maintaining a minimum 25% public shareholding spread post-buy-back, in line with Main Market Listing Requirements.
• Regulatory Safeguards: The company must comply with the Companies Act, Listing Requirements, and obtain all necessary approvals.
• Shareholder Action Required: Shareholders are entitled to attend, speak, and vote at the AGM, or appoint proxies to do so on their behalf. Proxy forms must be lodged by 23 May 2026 at 2.00 p.m.
• Directors’ and Substantial Shareholders’ Interests: Save for the indirect effect of increased percentage shareholdings due to the buy-back, no Director or Substantial Shareholder has a direct interest in the proposal.
• Mandatory Take-Over Code: The company highlights that it does not intend to trigger a mandatory takeover offer; should the buy-back result in substantial shareholders crossing the threshold, an exemption would be sought from the Securities Commission.

Historical Share Price Performance

MBL Shares have traded in the range of RM0.285 to RM0.410 over the past 12 months. The last traded price as of 31 March 2026 was RM0.325.

Corporate Actions and Recent Developments

• Bonus Issue of Warrants-B: In 2023, MBL undertook a bonus issue of 113,767,950 warrants on the basis of 1 Warrant-B for every 2 existing shares. All related listings have been approved by Bursa Securities, and the exercise could increase the company’s issued share capital significantly.
• Proposed ESOS: The company has also moved to introduce a new Employees’ Share Option Scheme, replacing the previous Share Grant Plan. This is expected to align employee interests with shareholders.
• Treasury Shares: As of the latest practicable date, MBL holds 21,085,900 treasury shares. No resale or cancellation of treasury shares has occurred in the past 12 months.
• Material Litigation: The company confirms that neither it nor its subsidiaries are involved in any material litigation, claims, or arbitration as at the latest practicable date.

What Investors Should Watch

• The outcome of the 20th AGM, especially the vote on the buy-back authority, could influence market sentiment and the company’s share price.
• The potential exercise of Warrants-B and implementation of the ESOS may increase the company’s share base, impacting dilution, share price, and future buy-backs.
• The Board’s execution of the share buy-back, depending on market conditions, can serve as a signal of confidence in the company’s intrinsic value.
• Any future decision to distribute treasury shares as dividends, or to cancel shares, can have a direct effect on shareholder returns and capital structure.

Conclusion and Directors’ Recommendation

The Board of Directors recommends that shareholders vote in favour of the proposed renewal, citing its potential to enhance shareholder value and provide capital management flexibility. The proposal will be tabled as Ordinary Resolution II (Resolution No. 7) during the 20th AGM.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors are encouraged to review the full Statement to Shareholders and consult their professional advisors before making any investment decisions. The information provided is based on the most recent public disclosures by Muar Ban Lee Group Berhad as of 31 March 2026. Share prices and outcomes of corporate actions may be subject to change.

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