KUALA LUMPUR (Sept 4): BCM Alliance Bhd (KL:BCMALL) has proposed a 10-to-1 share consolidation, meaning every 10 shares will be combined into one. It also plans to issue new shares of up to 30% of its total issued shares.
This is the second time in eight months that the company has proposed the share consolidation, after dropping a similar plan in January this year. No reason was given for the decision at the time.
The proposed consolidation will reduce the company’s issued shares from 2.03 billion to about 203.41 million. BCM Alliance said the exercise is intended to improve its capital structure and may reduce share price volatility.
Based on its closing price of half a sen on Aug 11, the company said the price could theoretically be adjusted to five sen post-consolidation, its bourse filing on Friday (Sept 4) showed.
The higher share price could also provide greater flexibility in determining issue prices for future corporate proposals, it added.
Separately, the proposed share issuance scheme will allow eligible directors and employees to subscribe to new BCM Alliance shares at an exercise price to be determined later.
The maximum number of shares available under the scheme will be capped at 30% of the company’s total issued shares at any point during the scheme’s duration.
The share issuance scheme shall be in force for five years, with the board able to extend for 10 years in aggregate from the effective date.
The exercise price will be based on the five-day volume-weighted average price immediately preceding the offer date, with a discount of no more than 10%.
Based on an illustrative exercise price of 4.6 sen, the full exercise of the SIS would involve the issuance of about 61.02 million new shares. This would raise about RM2.81 million.
BCM Alliance said proceeds from the scheme, if any, will be used for working capital, including operating and administrative expenses such as rental costs, utilities, office upkeep and staff salaries.
The proceeds may be placed in deposit with financial institutions and short term money market instruments, it added.
Both proposals are subject to approval by Bursa Malaysia Securities and shareholders at the forthcoming EGM, and other relevant approvals, where required.
The proposals are expected to be completed by the fourth quarter of 2026.
TA Securities is the principal adviser for the proposals.
On Friday, BCM Alliance’s share price closed down half a sen or 50% to half a sen, giving the group a market capitalisation of RM10 million.