KPower Proposes 1-to-4 Share Split With Free Warrants
•By Maher Saham
Artikel ini juga tersedia dalam Bahasa Melayu
Loading...
Kumpulan Powernet Bhd (KPower) has proposed a new share split plan to enhance the trading liquidity of its shares.
Under this proposal, one KPower share would be subdivided into four shares, accompanied by the issuance of free warrants.
KPower stated:
"The warrants will be distributed to eligible shareholders on the basis of 1 warrant for every 3 shares held after the share split,"
the group said in a stock exchange filing.
Before that, let us take a brief look at the corporate information regarding KPower. The company operates in the consumer products and services sector.
KPower is also listed on the Main Board of Bursa Malaysia.
Based on its annual report, KPower''s key activities include construction, logistics, real estate, and manufacturing.
The company is also focused on strengthening its business in the sustainable energy and utilities segment.
Its strategy includes expanding its geographical footprint across ASEAN, South Asia, Central Asia, the Middle East, and Europe.
Looking at the technical chart above, it is clear that KPower''s share price has been on an uptrend since early November, with the stock reaching RM4.63.
You can conduct further research by visiting MalaysiaStock.Biz.
Returning to the share split matter, KPower announced that the previously planned 1-to-2 share split, which was announced on 5 June, has been cancelled after taking into consideration the recent rise in the company''s share price.
This was because the company gave careful and earnest thought to finding the best way to reward its shareholders.
Furthermore, the share split with warrants represents a win-win combination for both the company and its shareholders.
With the share split, there will be greater liquidity, and shareholders will be rewarded for staying with the company for the long term.
"Therefore, we hope this will encourage greater investor participation in the company," said KPower chairman Datuk Dr Mohd Abdul Karim Abdullah in a statement.
So when will the entitlement date for this share split be announced?
The company stated that the entitlement date for the newly proposed share split and free warrants will be determined and announced at a later date.
This exercise requires both regulatory and shareholder approval.
No proceeds will be raised from the share split itself; however, the free warrants, which will have a five-year tenure, can be converted into KPower shares at an exercise price of RM2.50.
This is assuming they are fully exercised.
KPower expects to raise up to RM376.94 million from the warrants, which is expected to be used for future working capital.
In conclusion, following these corporate exercises, the group''s share capital is expected to increase to RM474.62 million comprising 603.11 million shares.
This is a change from RM97.73 million comprising 113.08 million shares as at 30 October.
Meanwhile, the group said it will continue to seek new investment opportunities in the region and further strengthen its ASEAN network.
It added that following successful investments in Indonesia and Nepal, the expanded regional network will create greater value for all stakeholders.
Additionally, the group is working to strengthen its existing business in sustainable energy and utilities.
Its strategy includes expanding its geographical footprint across ASEAN, South Asia, Central Asia, the Middle East, and Europe.
In conclusion, based on the company''s mission statement in its annual report, KPower has set its sights on growing and expanding internationally by continuously serving communities without borders in a responsible manner.
This demonstrates that the company has far-reaching and ambitious plans to advance its business while delivering the best services to its customers.
A share split is a process where one unit of a share is subdivided into multiple units. For example, a 1:4 share split means one old share is exchanged for four new shares. The share price is adjusted proportionally, so the overall value of an investor''s holdings remains the same.
A share split does not directly change the value of an investment, as the share price is adjusted according to the split ratio. However, it can increase trading liquidity and make the share price more affordable for retail investors, potentially attracting more buyers.
Free warrants give holders the right to purchase shares at a specific price within a set timeframe. They serve as an additional bonus that can yield profits if the share price rises above the warrant''s exercise price.
After the 1:4 share split, KPower''s share price will be divided to one quarter of the original price. If the pre-split price was RM4.00, the post-split price would be approximately RM1.00 per unit, but investors would hold four times the number of shares.
Ready to start investing? Open your CDS account today through our complete guide to begin investing on Bursa Malaysia.
Download our free stock basics ebook here to learn the fundamentals of stock investing from scratch.
Further reading: