Instacom shareholders approve bonus issue of free warrant per 2 shares held
Business & Markets 2013
Written by Bernama
Friday, 16 August 2013 16:16
* Exercise price of 33 sen is at 15% discount rate to yesterday's closing price and five-day weighted average price of 39 sen, with intent for warrants to be 'in-the-money' upon listing as reward to loyal shareholders.
* A total of 351,127,130 warrants to be issued on 30 August, with final entitlement date ("ex-date") being 28 August 2013.
KUALA LUMPUR (Aug 16): Malaysia's leading end-to-end solutions provider for the country's telecommunications industry, Instacom Group Berhad ("Instacom"), is pleased to announce that its shareholders at an Extraordinary General Meeting ("EGM") held today, had approved the company's proposed bonus warrants issue.
This proposed bonus issue was approved by Bursa Malaysia Securities Berhad on 23rd July 2013.
To recap, Instacom had on 12th June 2013 announced this bonus issue of one free warrant for every two Instacom shares in its efforts to reward shareholders for their continued support, in line with the company's strong balance sheet and robust growth.
"The exercise price of 33 sen per warrant was arrived at, after taking into consideration a discount rate of 15% to yesterday's closing price and five-day weighted average price of 39 sen, with the intent that they would be 'in-the-money' upon listing," said Instacom CEO Anne Kung.
This would mean shareholders stand to make immediate profits upon conversion of the warrants (provided the share price maintains at current levels).
"The bonus issue is intended to reward our shareholders, in line with the company's robust growth and our strong balance sheet," she further said, adding that the warrants, when listed, also present an opportunity for more investors to gain exposure to Instacom at a lower entry point to the mother share.
The equity form of rewarding shareholders is the preferred method for Instacom, as it will allow the company to conserve its cash balances for its ongoing business operations, as well as to fund any future merger and acquisitions activities as and when they arise.
Based on the existing issued and paid-up share capital of Instacom of RM70,225,426 comprising 702,254,261 Instacom shares, a total of 351,127,130 warrants will be issued on 30 August 2013, with the final entitlement date ("ex-date") being 28 August 2013.
RHB Research recommends Instacom as one of Malaysia's Top 5 'Jewels' among Bursa
Malaysia's Small Cap Companies.
Meanwhile, Instacom has been selected by RHB Research as one of Malaysia's Top 5 'Jewels' among Bursa Malaysia's Small Cap Companies, together with Cahya Mata Sarawak, Brahim's, Tambun and Wellcall. Instacom is the only listed company from the ACE market to be a Top 5 "Jewel" amongst RHB Research's Bursa Malaysia's 30 Small Cap Companies identified.
In its book entitled "Top Malaysia Small Cap Companies — 30 Jewels (2013 edition)" released for institutional investors, RHB Research recommends a 'buy' on Instacom with a fair value of 46 sen, based on a P/E multiple of 13x on FY14F earnings.
"All in all, we like the company for its strong growth prospects within the telecommunications space, its pool of recurring earnings, which provide earnings certainty, and its attractive valuations based on the stock's current price," stated the RHB Research chapter entitled "Instacom Group: Towering Ambitions."
These developments had resulted in Instacom being one of Bursa Malaysia's more actively-traded shares in recent days. During the past week, the Company's share has consistently emerged as among the Top 10 to Top 30 of most actively-traded shares in Bursa Malaysia.
"We are pleased with the consistently strong following of Instacom shares, as it shows our shares have ample liquidity and high trade velocity, with strong follow-through buying," said CEO Kung.
"The remaining four of the Top 5 'Jewels' are Main Market companies, and, in this light, Instacom is proud to have been selected and recommended by RHB Research as one of Malaysia's Top 5 Small Cap companies within this elite grouping," added CEO Kung.
Issued by Instacom Group Berhad