KUALA LUMPUR (Feb 28): Guan Chong Bhd (KL:GCB) said it plans to undertake a bonus issue on the basis of four bonus shares for every three existing shares held (four-for-three) to reward its shareholders and enhance the trading liquidity of its shares.

After the bonus issue of shares, the cocoa grinder will undertake a bonus issue of warrants to raise RM470 million in fresh funds over the coming three years for its working capital. 

The bonus issue of warrants will be on the basis of one warrant for every four shares held, based on the enlarged share capital.

The entitlement date for the bonus issue will be determined later, according to its filing, with the warrants' entitlement date to be the same with the bonus issue.

As at February 21, Guan Chong had an issued share capital of RM495.24 million, comprising 1.17 billion shares.

For illustrative purposes, based on the five-day volume weighted average market price of Guan Chong shares of RM4.13 sen on February 21, the theoretical ex-bonus and free warrants share price would be about RM1.75.

Meanwhile, the exercise price of warrants is assumed to be RM1.60 each, representing a discount of 9.6% to the theoretical ex-bonus price of RM1.77. Based on this exercise price, and assuming full exercise, Guan Chong expects to raise gross proceeds of RM470 million, which will be allocated for its working capital.

Driven by higher selling prices for cocoa products, Guan Chong posted a record high quarterly net profit of RM212.98 million for the fourth quarter ended Dec 31, 2024 (4QFY2024), compared with RM15.17 million a year earlier, while revenue surged 90.2% year-on-year to a record RM3.37 billion from RM1.77 billion.

For the full year, Guan Chong’s net profit more than quadrupled to a record high of RM429.18 million, compared with RM100.93 million in FY2023. Annual revenue nearly doubled to a record high of RM10.44 billion from RM5.32 billion in FY2023.

In January, the group sealed a deal to acquire a 25% stake in the Ivory Coast-based cocoa manufacturing outfit Transcao Côte d'Ivoire (Transcao CI) for €28.08 million (RM130.1 million), cash.

Guan Chong's share price has closely followed the cocoa price rally that began in early 2024. Its share price staged a rally from RM1.60 to RM4.40 and experienced more volatility in recent months following the fluctuation of cocoa prices. The stock closed at RM3.88 on Friday, giving it a market capitalisation of RM4.56 billion.