KUALA LUMPUR (Jan 23): YTL Corp Bhd (KL:YTL) and YTL Power International Bhd (KL:YTLPOWR) have each proposed a bonus issue of free warrants, on the basis of one free warrant for every five shares held in the respective companies.
The warrants are planned to be exercised at a discount to the share prices of each company — at 37% discount for YTL Corp, and a 39.5% discount for YTL Power based on their closing prices on Thursday — bourse filings showed.
If fully exercised, the warrants will bring in RM3.4 billion to YTL Corp, and RM2.2 billion to YTL Power, according to the filings. YTL Corp owns a 54.94% stake in YTL Power.
YTL Corp's bonus issue entails up to 2.27 billion warrants, to be issued at RM1.50 each, compared to its Thursday closing price of RM2.38.
The discount reflects the board’s intention to reward shareholders while addressing future funding needs of the company and its subsidiaries, it said.
If fully exercised, the issuance could generate gross proceeds of up to RM3.4 billion.
The majority of this amount — approximately RM2.21 billion — would be allocated for the exercise of warrants to be held in YTL Power.
“For illustration purposes, YTL Corp held 4.5 billion YTL Power shares as of Jan 3, and will be entitled to 900.53 million YTL Power warrants pursuant to YTL Power's proposed bonus issue of warrants,” said YTL Corp.
Another RM600 million is earmarked for the repayment of bank borrowings, while RM594.1 million will fund future projects or investments, said YTL Corp, which also has exposure to the infrastructure construction, cement, property, and hotel segments.
As of Sept 30, 2024, YTL Corp’s total borrowings, including bonds, stood at RM46 billion.
YTL Power's bonus issue, meanwhile, totalled 1.67 billion warrants, with a three-year tenure and exercise price of RM2.45. Shares of YTL Power, which is in the midst of setting up its first artificial intelligence data centre, closed at RM4.05 on Thursday.
Both YTL Corp and YTL Power expect their respective bonus warrant issuances to be completed by the second quarter of 2025. CIMB has been appointed as the principal adviser for the proposals.
At the close of trading on Thursday, YTL Corp had a market capitalisation of RM26.4 billion. Meanwhile, YTL Power was valued at RM33.18 billion.