Kinergy Advancement Berhad Announces Proposed Renewal of Share Buy-Back Authority

Key Points From the Statement to Shareholders

• Share Buy-Back Authority Renewal: Kinergy Advancement Berhad (“Kinergy”) is seeking shareholder approval for the proposed renewal of authority to purchase up to 10% of its total issued shares. This will be tabled as Special Business at the upcoming 29th Annual General Meeting (AGM) scheduled for 15 June 2026.
• Previous Authority Expiry: The authority granted at the last AGM (29 May 2025) will expire at the conclusion of the forthcoming AGM, necessitating this renewal for continued flexibility.
• Share Buy-Back Mechanism: The Board, if approved, may cancel the purchased shares or retain them as treasury shares for resale, distribution as share dividends, transfer for employee share schemes, or as purchase consideration in corporate transactions.
• Quantum: Kinergy can buy back up to 218,506,606 shares, representing 10% of its issued shares, factoring in 88,898 shares already held as treasury shares.
• Funding: The buy-back will be funded through internally generated funds and/or bank borrowings, subject to available retained profits and solvency tests as per Section 112(2) of the Companies Act 2016.
• Public Shareholding Spread: The company’s public spread is 62.24%. Kinergy affirms it will not conduct buy-backs that would breach Bursa Malaysia’s 25% minimum public shareholding requirement.
• Price Parameters:
  • Buy-back price must not exceed 15% above the weighted average market price for the five days prior to purchase.
  • Resale or transfer of treasury shares must be at or above the five-day weighted average price, or at a discount of no more than 5% subject to certain conditions.
• Potential Share Price Impact:
  • Buy-backs may enhance earnings per share (EPS) if shares are cancelled, as the share base shrinks.
  • Treasury shares may be resold for capital gains or distributed as dividends, potentially rewarding shareholders and stabilizing share price volatility.
• Financial Effects:
  • Reduces working capital and cash flow, depending on the size and price of buy-backs.
  • May impact net assets (NA) per share—decreases if buy-back price exceeds NA, increases if below.
  • Dividend distribution capacity may decrease as buy-backs are funded from retained profits.
• Shareholding Impact: Substantial shareholders like Dato’ Lai Keng Onn and Stocqtech Sdn. Bhd. will see a proportional increase in their shareholding percentages if the buy-back is implemented in full, as the total number of issued shares will decrease.
• Take-Over Implications: Shareholders may trigger a mandatory takeover obligation if their percentage holding crosses certain thresholds due to the buy-back. However, Kinergy does not intend to cause any shareholder to trigger such obligations and will monitor buy-back activity accordingly.
• Historical Share Prices: Over the past 12 months, KINERGY shares traded in a range between RM0.305 and RM0.420, with the last transacted price at RM0.385.
• Directors’ and Major Shareholders’ Interests: Other than proportional increases in shareholding percentages, none of the directors, major shareholders, or their connected persons have any direct or indirect interest in the buy-back or potential resale of treasury shares.
• Approval Required: The proposed renewal is subject to shareholder approval at the 29th AGM. No other regulatory approvals are required.
• Directors’ Recommendation: The Board unanimously recommends shareholders vote in favour of the proposal, asserting it is in the best interests of the company.

Important Considerations for Shareholders

• Potential Share Price Sensitivity: The buy-back can be price sensitive as it may reduce the share float, potentially supporting or increasing share value. However, use of cash or borrowings for buy-backs could limit resources for other investments or dividends.
• EPS Enhancement: If shares are cancelled, EPS may rise, which could be positively received by the market, possibly leading to a higher share price.
• Take-Over Code Risk: Investors nearing the takeover thresholds should monitor their holdings, as inadvertently breaching these could trigger costly mandatory offer requirements.
• Public Spread Compliance: If public shareholding falls below 25% due to buy-backs, trading of the shares could be suspended. The Board commits to monitoring this risk.
• Liquidity and Capital Structure: Investors should consider that buy-backs reduce liquidity and may affect the company’s capital structure, possibly impacting future fundraising or expansion plans.

AGM and Voting Information

The 29th AGM is scheduled for Monday, 15 June 2026 at 9:00 a.m. at The Pearl Kuala Lumpur, Swan 3, Level 7, Batu 5, Jalan Klang Lama, Kuala Lumpur. Shareholders unable to attend may appoint a proxy by submitting the Proxy Form by Saturday, 13 June 2026, 9:00 a.m. via hard copy or the Securities Services e-Portal.

Inspection of Documents

Shareholders may inspect the company’s Constitution and the audited financial statements for the years ended 31 December 2024 and 2025 at the registered office, by appointment, during normal business hours up to the date of the AGM.

Conclusion

The proposed renewal of the share buy-back authority provides Kinergy Advancement Berhad with strategic flexibility to manage its capital structure, reward shareholders, and potentially enhance share value. However, shareholders should weigh this against the possible reduced capacity for dividends and alternative investments.

Disclaimer

This article is for informational purposes only and does not constitute investment advice. Investors should read the full shareholder statement and consult professional advisers before making any investment or voting decisions. The information is based on the Statement to Shareholders dated 30 April 2026 and public disclosures. Kinergy Advancement Berhad and its Board accept no responsibility for actions taken based on this summary.

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