Vote in favour of warrant issue, Tanco board tells shareholders

Vote in favour of warrant issue, Tanco board tells shareholders
-A +A

KUALA LUMPUR (July 17): Tanco Holdings Bhd’s board of directors has urged shareholders to approve the group’s proposed one-for-two free warrant issue, saying it is in the best interest of the group.

Shareholders are scheduled to vote on the proposal at an extraordinary general meeting on Aug 2.

In a circular to shareholders today, Tanco said the board is making the recommendation after having considered all aspects of the issue, including the rationale and effects.

On June 13, the group had raised the exercise price for the warrants to 5 sen from 2 sen previously “after taking into consideration prevailing market conditions, historical trading prices of the shares for the past 12 months and the revised tenure of the warrants.”

The new price represents a 50% discount to the five-day volume weighted average price (VWAP) of the group’s shares up to the last traded date prior to the announcement, versus an 80% discount to its previously announced five-day VWAP.

The property developer had also extended the exercise period to three years, after proposing a one-year period during its initial announcement of the free warrants on Sept 21 last year.

According to Tanco, Bursa Securities had on July 11 approved the listing of up to 406.72 million free warrants, as well as an identical listing of new Tanco shares arising from the exercise of the warrants.

Upon the full exercise of the warrants, Tanco expects to raise between RM16.79 million and RM20.34 million, which will be used as working capital for the group. This may include development expenditure for its property development division and repayment of borrowings

Shares in Tanco closed up 0.5 sen or 4.17% at 12 sen today, giving the group a market capitalisation of RM83.93 million.