KUALA LUMPUR (Sept 26): JF Technology Bhd (JF Tech) has proposed to undertake a bonus issue of 84 million new shares on the basis of two bonus shares for every three existing JF Tech shares held in the company.

In a filing with Bursa Malaysia this afternoon, JF Tech said the entitlement date would be determined later.

It added that the actual number of bonus shares to be issued will depend on the total number of issued shares as at entitlement date.

JF Tech said the proposed bonus issue will be wholly capitalised from its share premium account at 10 sen per bonus share, being reference to the par value of JF Tech shares, adding it would be a way of capitalising RM8.4 million from the share premium account of the company.

On the rationale for the exercise, JF Tech said it was viewed as the most appropriate avenue of rewarding existing shareholders of the company, while potentially enhancing its capital base.

JF Tech has an issued share capital of RM12.6 million comprising 126 million shares. Following the proposed bonus issue, its share capital will increase to RM21 million comprising 210 million shares.

Net assets per share will fall from 0.24 sen as at June 30, 2017 to 0.15 sen post-bonus issue.

"The proposed bonus issue, which is expected to be completed by the fourth quarter of 2017, is not expected to have an immediate material effect on the consolidated earnings of JF Tech for the financial year ending June 30, 2018.

However, the consolidated earnings per share of JF Tech is expected to be diluted as a result of the increase in the number of JF Tech shares in issue pursuant to the proposed (exercise)," it added.

M&A Securities has been appointed as adviser for the proposed bonus issue.

At midday break today, JF Tech dipped 0.96% or 2 sen to RM2.06, with 303,500 shares traded.