KUALA LUMPUR (Jan 16): Caely Holdings Bhd has proposed a bonus issue of 40 million warrants on the basis of one warrant for every two existing shares held to reward its shareholders.

In a filing with Bursa Malaysia, Caely said assuming an indicative exercise price of 50 sen per warrant, the exercise could potentially raise gross proceeds of RM20 million, which will be used for future working capital, including for staff costs and other expenses.

The company has yet to set an exercise price or entitlement date for the warrants, which will be determined at a later date.

“The company is embarking on the proposed bonus issue of warrants instead of other available proposals to reward existing shareholders of the company, after taking into cognisance the financial performance and financial position of the group,” Caely said.

Besides rewarding its shareholders, the company said the issuance can potentially enhance its capital base, provide an avenue for shareholders to increase their equity in the company, as well as increase the liquidity of Caely’s shares upon exercise of the warrants.

Assuming full exercise of the warrants, the company’s share capital will increase to RM69.42 million, from RM49.42 million as at March 31, 2017, while net assets will be lower at 90 sen per share, as a result of increase in the number of outstanding shares to 120 million.

Meanwhile, its gearing level will fall to 0.22 times, from 0.27 times currently.

The company expects to complete the exercise by the first quarter of 2018.

Caely shares fell 2 sen or 1.5% to close at RM1.31 today, giving it a market capitalisation of RM104.8 million.