KUALA LUMPUR (May 7): Singapore Exchange-listed Duty Free International Ltd, a 75.53%-owned unit of Atlan Holdings Bhd (KL:ATLAN), has proposed a renounceable rights issuance of warrants.

The proposed exercise, involving the issuance of up to 399.4 million warrants on an allotment of one warrant for every three existing shares, is to fund the duty-free retail outlet operator's working capital and future growth plans, Duty Free International said in a filing on the Singapore Exchange.

The warrants, to carry a five-year exercise period, will be issued at an issue price of 0.1 Singapore cent per warrant and have an exercise price of 8.5 Singapore cents per warrant, cumulatively 8.6 Singapore cents — a 17.8% premium to Duty Free International shares’ closing price of 7.3 Singapore cents on May 6.

“The proposed warrants issue will further strengthen the group’s financial position and capital base of the group so as to support strategic growth initiatives," Duty Free International said.

“The additional capital from the net subscription proceeds and exercise proceeds will provide greater financial flexibility for the group’s existing and future operations, allowing the group to seize opportunities for business growth in a timely manner as they arise,” it added.

Net subscription proceeds are expected to amount to S$200,000 (RM617,890), while proceeds from the full exercise of the warrants will amount to S$33.9 million (RM104.73 million).

The warrants will not be underwritten, Duty Free International noted. That said, Atlan has given its undertaking to subscribe to its allotment — 301.68 million warrants — as well as the rest of the issuance — up to 97.72 million warrants — should they remain unsubscribed.

Duty Free International noted it has not undertaken any equity fundraising in the past 12 months.

Shares of Atlan ended five sen or 1.75% lower at RM2.80 on Thursday, valuing the company at RM710.22 million.