KUALA LUMPUR (July 21): Sanichi Technology Bhd is planning to consolidate its shares on the basis of three existing shares into one share (3-to-1).

"The proposed share consolidation would lead to a reduction in the number of shares available in the market and may reduce the magnitude of fluctuation of the company's market capitalisation," said Sanichi in a filing to Bursa Malaysia today.

Sanichi said on completion of the exercise, the theoretical market price of each share will increase by three times and the total number of shares in issue will be reduced by the corresponding ratio.

As at July 12, 2017, being the latest practicable date prior to the date of this announcement (LPD), the company's issued share capital was RM85.95 million comprising 858.92 million shares, said Sanichi.

For illustration purposes, the 858.92 million shares — assuming none of its outstanding convertible securities are exercised and/or converted into new shares — will be consolidated into 286.31 million consolidated shares pursuant to the exercise, said Sanichi.

Further, based on the last transacted market price of shares as at the LPD of 6.5 sen, the theoretical adjusted reference share price of Sanichi shares on completion of the exercise could be adjusted to 19.5 sen, said Sanichi.

Moreover, Sanichi said the exercise will also result in an adjustment to the reference price of its existing warrants.

For illustration, based on the last transacted market prices of Warrants B, Warrants C and Warrants D up to the LPD of 1.5 sen, 1.5 sen and 3 sen respectively, they could theoretically be adjusted to 4.5 sen, 4.5 sen and 9 sen respectively after adjustments, said Sanichi.

It expects the proposed consolidation to be completed by the fourth quarter of this year.

Sanichi shares slid half a sen or 7.14% to settle at 6.5 sen today for a market capitalisation of RM55.83 million.