This article first appeared in The Edge Financial Daily on July 20, 2017

KUALA LUMPUR: Bright Packaging Industry Bhd is planning to undertake a bonus issue on the basis of one bonus share for four existing shares held (one-for-four), to reward its shareholders and enhance the trading liquidity of its shares.

The exercise will involve up to 55.49 million new shares, which will be issued to shareholders whose names appear in its record of depositors on an entitlement date to be fixed, it said in a Bursa Malaysia filing yesterday.

The proposed bonus issue will be capitalised from its share premium and retained earnings, at 50 sen per bonus share, or RM27.74 million in total.

The exercise, in addition to RM150,000 of estimated expenses, could cancel out its share premium which stood at RM15.58 million as at Feb 28, and reduce its retained earnings of RM17.22 million — after adding dividends paid by its subsidiaries yesterday to the unaudited balance as at Feb 28 — by as much as RM12.31 million to RM4.91 million.

As at yesterday, Bright Packaging's issued share capital stood at RM82.13 million comprising 164.26 million shares. On completion of the exercise, this share base could rise to as much as RM157.20 million, comprising 277.47 million shares.

It expects the proposed exercise to be completed by the third quarter of this year.

Bright Packaging shares closed 0.5 sen higher at 31 sen, with a market capitalisation of RM50.92 million.