KUALA LUMPUR: Infrastructure company Taliworks Corp Bhd plans to undertake a share split and a free warrants issue to enhance the marketability and liquidity of its shares.

The proposed share split involves the subdivision of every two Taliworks shares of 50 sen each into five shares of 20 sen each.

The proposed free warrants issue will involve the issuance of up to 241.93 million warrants on the basis of one warrant for every five Taliworks shares held. It will be implemented after the the proposed share split.

“The warrants are exercisable at any time within three years commencing on and including the date of the issuance of warrants,” said Taliworks in a statement yesterday.

Both proposals are subject to approvals from Bursa Securities and the company’s shareholders, but are expected to be completed by the fourth quarter of 2015.

“The proposed share split is expected to enhance the marketability and trading liquidity of Taliworks shares...it will also encourage ownership of Taliworks shares by a broader group of shareholders by increasing the number of the group’s shares in the market and improving retail participation,” said Taliworks executive director Lim Yew Boon.

The exercise price of the warrants will be fixed at a premium of at least 15% to the theoretical ex-price of Taliworks shares before the entitlement date, and shall not be lower than the par value of the shares.

Taliworks’ board believes the proposed free warrants are the appropriate avenue to reward its shareholders and enable them to participate in an equity derivative of the group without incurring any cost,” said Lim.

The enlarged number of shares after the corporate exercises, assuming the full exercise of the outstanding employee share option scheme and the completion of its ongoing private placement exercise, is estimated to be at 1.45 billion shares of 20 sen each.

Taliworks (fundamental: 1.3; valuation: 2.4) shares closed nine sen or 3.01% higher at RM3.08 yesterday, with a market capitalisation of RM1.31 billion.

This article first appeared in The Edge Financial Daily, on July 23, 2015.