KUALA LUMPUR (Aug 21): Home furniture manufacturer Wegmans Holdings Bhd has proposed to undertake a bonus issue of up to 156.25 million free warrants (Warrants B) on the basis of one free warrant for every four shares held on an entitlement date to be announced later.

In a bourse filing today, Wegmans said the proposed bonus warrants will be implemented in a single tranche. The bonus warrants will have a tenure of three years commencing from the date of issue.

"The actual number of Warrants B to be issued will depend on the number of Wegmans shares in issue on the entitlement date," it added.

As at Aug 19, 2020, the issued share capital of Wegmans was RM51.95 million comprising 500 million shares and 125 million outstanding warrants 2019/2022.

Wegmans said the exercise price of Warrants B has been fixed at 23.5 sen per Warrant B, which represents a discount of 13.16% to the five-day volume weighted average market price of Wegmans shares on Aug 19 of 27.06 sen.

Assuming the full exercise of Warrants B at 23.5 sen per Warrant B, the gross proceeds to be raised by the company will range between RM29.38 million and RM36.72 million.

The proceeds arising from the exercise will be utilised for working capital such as payment of trade and other payables, salaries, utilities, finance costs and other administrative expenses.

Barring any unforeseen circumstances, the proposed bonus warrants is expected to be completed by the fourth quarter of 2020. RHB Investment Bank Bhd is the principal adviser for the exercise.

Wegmans shares closed up 6.5 sen or 26% at 32 sen today, bringing a market capitalisation of RM157.5 million. A total of 30.35 million shares were traded.