KUALA LUMPUR (Jan 4): Pacific & Orient Bhd (P&O) has proposed to undertake a bonus issue on the basis of one bonus share for every six existing shares held, on an entitlement date to be fixed.

The proposal, intended to reward shareholders for their continuous support of the company, will involve 40.99 million new P&O shares.

The bonus shares will be capitalised at 50 sen each from the company's share premium account as at Jan 30, 2017 — a day before the Companies Act 2016 took effect — which stood at RM24.3 million.

Under no par value regime of the new law, the concept of share premium is no longer applicable and any share premium balance is to be consolidated as part of the share capital.

But under Section 618(3)(c) of the new law, read together with Practice Note No. 1/2017 issued by Companies Commission of Malaysia, P&O said the company may use the balance in the share premium account to fully pay up the bonus shares within 24 months from Jan 31, 2017.

"The board confirms that the company has sufficient reserves available to be capitalised for the proposed bonus issue and the reserves required for capitalisation of the proposed bonus issue are unimpaired by losses on a consolidated basis based on the company's latest audited consolidated financial statements for the financial year ended Sept 30, 2016," it added.

The proposed bonus issue is expected to be completed in the first quarter of this year.

As of closing, P&O's share price gained 2.4% or 3 sen to close at RM1.27, giving it a market capitalisation of RM297.3 million.