Kanger shares, warrants down on active trading

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KUALA LUMPUR (May 5): Shares and warrants of Kanger International Bhd were actively traded today with their prices heading south on Bursa Malaysia.

Kanger’s warrants, Kanger-WA, are the second most traded counter on the local bourse. Some 67.4 million units of Kanger-WA changed hands, which is equivalent to about 26% of the total number of warrants issued by the bamboo flouring manufacturer. Its warrant price fell 2.5 sen or 14% to 15.5 sen — the lowest closing since the derivatives were listed on April 20.

The fall on warrant price could be an indicator that investors are taking profit on the warrants, which were issued free to shareholders through a bonus issue of warrant on the basis of one warrant for two shares held.  

Meanwhile, Kanger shares were the fourth most actively traded counter. Its share price fell two sen or 6.6% to 28.5 sen — the lowest level since December 2013.

Last month, Kanger managed to obtain shareholders’ approval on a fund raising exercise through issue of redeemable convertible medium term notes (RCMTN), which may eventually result in rather massive shareholding dilution.

The RCMTN was issued to third-party investors to fund its expansion.

Kanger executive director Amita Chong, however, defended that the dilution may not be as massive as expected. In an interview with TheEdge Weekly, Chong pointed out that it was not necessary for Kanger to draw down the entire RM100 million of the RCMTN.

Singapore investors Advance Opportunities Fund and Advance Capital Partners Pte Ltd have agreed to provide the sum in a conditional subscription agreement dated Jan 2, 2014.

Chong said the figure drawn will depend on Kanger’s need for funding at the time, but noting that dilution is inevitable “when you want to grow”.