Ewein proposes one-for-four bonus warrants, Esos, DRP

KUALA LUMPUR (May 4): Ewein Bhd has proposed to undertake a bonus issue of up to 75.4 million free warrants on the basis of one warrant for every four shares held on an entitlement date to be announced later.

The exercise price of the warrants will be determined by the board of directors at a later date. The tenure of the warrants will be three years.

Assuming full exercise of the warrants at the price of 80 per warrant, representing a premium of 22 sen or 37.93% to the five-day volume weighted average price of Ewein shares of 58 sen per share as at Dec 31, 2018, Ewein could raise maximum gross proceeds of RM60.32 million.

"Such proceeds if raised, will be utilised for the future working capital of Ewein Group, which include, among others, payment for trade and other payables, staff costs such as salaries, statutory contributions and employee benefits (including medical) and other operating expenses such as utilities," said Ewein.

It added that the proceeds to be utilised for each component of working capital are subject to the group’s operating requirements at the time of utilisation and therefore cannot be determined at this juncture.

However, it expects to utilise the proceeds for the said working capital requirements within a period of 12 months, as and when the proceeds are received arising from the exercise of the warrants.

It is also planning to set up an executives’ share option scheme (Esos) of up to 10% of the group's issued shares at any point of time during the duration of the scheme for eligible executive directors and senior management of Ewein and its subsidiaries.

Ewein is also proposing for a dividend reinvestment plan (DRP) that provides the shareholders of Ewein with an option to elect to reinvest their cash dividends declared by Ewein in new shares. This is a way to retain cash to fund the group’s future working capital.

"Barring any unforeseen circumstances, the proposed bonus issue of warrants and proposed Esos are expected to be completed
and implemented in the third quarter of 2019, while the proposed DRP is expected to be ready for implementation in the second half of 2019," it said.

Affin Hwang Investment Bank Bhd has been appointed to act as the principal adviser for the proposals.

Ewein shares closed up 2 sen or 2.98% at 69 sen yesterday, with 34.46 million shares done, bringing a market capitalisation of RM208.09 million. — theedgemarkets.com

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