KUALA LUMPUR (Aug 21): Ibraco Bhd (Ibraco), which has just completed its rights issue that expanded its share base, is now planning a bonus issue of 70.92 million new ordinary shares of RM1 each, on the basis of two bonus shares for every five existing shares held in Ibraco, on an entitlement date to be fixed.

Subsequent to the proposed bonus issue, it plans to subdivide every one existing share held into two ordinary shares of 50 sen each, according to Ibraco’s filing to Bursa Malaysia today.

It is also proposing to subdivide every one existing redeemable cumulative preference share (RCPS) of RM1 each into two RCPS of 50 sen each.
 
Ibraco said the proposed bonus issue, besides to reward shareholders and maintain their percentage equity interest in Ibraco, is to enlarge the share capital base and increase trading liquidity of its shares.
 
Ibraco said the proposed bonus issue and proposed subdivision are expected to be completed in the fourth quarter of 2015.

As at Aug 21, the issued and paid-up share capital of Ibraco is RM177.29 million, comprising 177.29 million shares.
 
On completion of the proposed bonus issue and the proposed subdivision, the issued and paid-up share capital of Ibraco will be increased to RM248.20 million, comprising 496.41 million subdivided shares.

As at Aug 21, there are no outstanding preference shares issued by Ibraco.

The corporate exercises, which will have a dilutive impact on the earnings per share of the group for the financial year ending Dec 31 (FY15), is subject to shareholders’ approval at an extraordinary general meeting (EGM) to be convened.
 
Kenanga Investment Bank Berhad has been appointed the adviser for the proposals.

To recap, Ibraco announced on Monday (Aug 17) that its rights issue was oversubscribed by 47.5% or 24.06 million rights shares, over the total 50.65 million rights shares available.

The renounceable rights issue, at an issue price of RM1 per rights share on the basis of two rights share for every five existing shares, raised RM50.65 million for the company.

The bulk of that would be used to repay borrowings (59.2%), while the remainder would finance its development project at a tract of 5,825 sq m land in Kuala Lumpur.

Ibraco (fundamental: 1.9; valuation:2.4)'s share price, which has largely been trending upward since Jan 2 (RM1.45), dipped 5 sen or 2.86% to close at RM1.70 today, for a market capitalisation of RM310.25 million.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)