Monday 27 May 2024
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KUALA LUMPUR (June 30): FGV Bhd has proposed a bonus issue as part of the plantation group's rectification plan to comply with Bursa Malaysia's public shareholding spread requirement.

FGV’s public shareholding spread stood at 13.09% as at May 22, far short of the minimum requirement of 25%.

In a Bursa Malaysia filing on Friday (June 30), FGV said the bonus issue entails the issuance of 364.82 million new Islamic redeemable preference shares (FGV RPS-i) on the basis of one FGV RPS-i for every 10 existing FGV shares. The FGV RPS-i will be issued at 10 sen each at a date to be determined later.

FGV said its parent company Federal Land Development Authority, which holds an 81.91% stake in FGV, intends to dispose of such number of FGV shares as may be required in order for FGV to comply with the public spread, after the completion of the bonus issue.

“The board is of the view that the proposed bonus issue is the most appropriate avenue for FGV to achieve the objective of providing FGV’s shareholders with better exposure via preferential dividends, to the distributable profits of the key companies in FGV Group involved in upstream plantation activities, and for FGV to meet the public spread,” said FGV.  

FGV said the bonus issue will not have any effect on the shareholdings of the substantial shareholders of FGV, as the bonus issue shares will not be convertible into FGV shares.  

In addition, it said the bonus issue would also provide an opportunity for the entitled shareholders to rebalance their portfolio exposure in FGV based on their respective risk appetites and investment preferences, as FGV will have two sets of securities being traded, namely the FGV RPS-i which would give better exposure to upstream activities, and the FGV shares which would give exposure to the downstream and other remaining businesses in the FGV group.

As a result, it said the FGV RPS-i and FGV shares post-completion of the bonus issue may also appeal to different types of investors, hence potentially broadening FGV’s existing shareholding base.

“The holders of the FGV RPS-i are not entitled to any voting rights and/or any other distributions in FGV, save and except in respect of: (i) any resolution to wind up FGV or during the winding-up of FGV; or (ii) any proposal or transaction that varies the rights and privileges attached to the FGV RPS-i, including any resolution to amend the constitution of FGV,” it added.

On top of that, FGV has proposed amendments to its constitution to facilitate the implementation of the proposed bonus issue.

The proposals, which are subject to approval from the Shariah Advisory Council of the Securities Commission Malaysia, Bursa Securities and FGV shareholders, are expected to be completed in the fourth quarter of this year.

Maybank IB has been appointed as the principal adviser for the proposals.

Shares in FGV closed up eight sen or 5.84% to RM1.45 on Friday, bringing the group a market capitalisation of RM5.29 billion.

Edited ByS Kanagaraju
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