KUALA LUMPUR (Oct 25): Yew Lee Pacific Group Bhd has proposed a bonus issue of warrants on the basis of one warrant for every two existing ordinary shares, on an entitlement date to be determined later. 

The exercise entails the issuance of 266.22 million warrants, based on Yew Lee’s total issued share capital of RM67.53 million, comprising 532.4 million ordinary shares as of Oct 3 (latest practicable date, a.k.a. LPD). 

The exercise price of the warrants has been fixed at 28 sen, which represents a premium of approximately 9.67% to the five-day volume weighted average market price of the shares up to and including the last trading day immediately preceding the LPD of 25.53 sen. 

For example, the gross proceeds to be raised upon full exercise of the warrants is RM74.54 million, wherein 60% of the proceeds will be used for the payment of operation overhead of the group, which include labour costs, utilities and other factory overhead expenses. 

The remaining 40% of the proceeds will be allocated for purchase of raw materials, such as monofilament materials required for the manufacturing of industrial brushes business segment, it said in a bourse filing.

On the other hand, Yew Lee also proposed to establish an employee share option scheme (ESOS) that will not exceed 30% of the total number of issued shares for eligible employees and directors of Yew Lee and its subsidiaries.

Yew Lee is an investment holding company. Through its subsidiaries, the Perak-based group is principally involved in the manufacturing of industrial brushes and trading of industrial hardware and machinery parts. 

M&A Securities and Eco Asia Capital Advisory Sdn Bhd have been appointed as the principal adviser and financial adviser, respectively to the company in relation to the proposals, which are expected to be completed by the first quarter of 2023.

Yew Lee closed at 28.5 sen on Tuesday (Oct 25), giving it a market capitalisation of RM154.45 million.