KUALA LUMPUR: Poultry farming company LTKM Bhd via Hong Leong Investment Bank Bhd announced a series of corporate proposals yesterday: a 1-for-2 bonus issue, a 1-for-2 share split, and the setting up of an employees’ share option scheme (Esos).

On the proposed bonus issue, LTKM said it will issue 21.68 million bonus shares of RM1 each, which will increase its issued and paid-up capital to 65.05 million shares or RM65.05 million, from 43.37 million shares or RM43.37 million shares currently.

“The proposed bonus issue aims to reward the shareholders for their loyalty and continuing support. This will enable them to have a greater participation in the equities of the company in terms of number of shares held, while maintaining their percentage of equity interest,” the group said in a filing with Bursa Malaysia yesterday.

The bonus issue entitlement date will be determined at a later date upon the receipt of all relevant approvals, it said.

Subsequent to the bonus issue, LTKM proposed to undertake a 1-for-2 share split (each RM1 existing share to be split into two ordinary 50 sen shares) — also on an entitlement date to be fixed later — that will up its share capital to 130.1 million shares from 65.02 million shares earlier, while maintaining the paid-up capital at RM65.05 million.

“The proposed share split is expected to enhance the marketability and trading liquidity of LTKM’s shares as a result of the increase in the number of shares in issue. It would not have any direct impact on the market capitalisation.

“However, it will result in an adjustment to the market price of the group’s share to a more affordable entry price, which is expected to appeal to a wider group of public shareholders and investors,” it added.

To facilitate the implementation of the proposed share split, LTKM said it will amend its memorandum and articles of association.

Further, LTKM has also proposed to establish an Esos of up to 10% of its issued and paid-up capital, which will be offered to its eligible employees, directors — including its non-executive directors — and subsidiaries.

LTKM (fundamental: 3; valuation: 2.4) expects to complete the series of corporate proposals by the second half of 2015.

LTKM is controlled by its managing director Datuk Tan Kok, who owns a 67.52% stake.

The stock ended four sen or 0.67% higher at RM6.04 yesterday, giving it a market capitalisation of RM261.94 million.

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. Go to www.theedgemarkets.com for more details on a company’s financial dashboard.

This article first appeared in The Edge Financial Daily, on April 8, 2015.