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TAFI approves proposed bonus issue of shares, warrants and new shareholders’ mandate

KUALA LUMPUR (Jan 24): TAFI Industries Bhd has announced that it has received approval for the proposed bonus issue of 252.95 million new ordinary shares in the company on the basis of two bonus shares for every one existing ordinary share held on the entitlement date.

The furniture manufacturer has also received approval for the proposed bonus issue of up to 63.24 million warrants on the basis of one warrant for every two existing TAFI shares held on the entitlement date.

In addition, the company received approval for the proposed new shareholders’ mandate for recurrent related party transactions (RPTs) of a revenue or trading nature.

The three ordinary resolutions set out in the notice of extraordinary general meeting (EGM) dated Jan 6 had been tabled and approved at the EGM held on Friday, TAFI said in a statement.

All of the resolutions TAFI said, were voted for and duly carried during the EGM, with the results of the poll being validated by independent scrutineers, Quantegic Services Sdn Bhd.

TAFI said the bonus issue of shares was undertaken to reward the company’s shareholders, improve the trading liquidity and marketability of TAFI shares, and result in the bonus shares being more affordable in order to appeal to a wider group of public shareholders and investors.

The exercise price for the bonus issue of up to 63.24 million warrants with five-year tenure has been fixed at 70 sen per warrant, which represent a discount of 15.75 sen or 18.37% over the theoretical ex-bonus price (TEBP) of TAFI shares of 85.75 sen, calculated based on the five-day volume weighted average price (VWAP) up to and including Jan 20, 2022.

TAFI said it will announce the entitlement date and issuance date in due course.

As for the bonus issue of warrants, TAFI noted it was undertaken to reward the company’s shareholders by enabling them to participate in convertible securities of the company which are tradeable in Bursa Securities without incurring any cost.

Besides that, TAFI said it is to provide existing shareholders of the company with an opportunity to increase their equity participation in the company through the exercise of warrants at a predetermined price during the tenure of the warrants.

On top of that, TAFI said it is to allow existing shareholders of the company to benefit from any potential capital appreciation of the warrants, as well as help to strengthen the company’s capital base and shareholders’ funds as well as potentially providing additional working capital for the group, as and when the warrants are exercised.

Based on the exercise price of 70 sen per warrant and in the event the warrants are fully exercised, TAFI is expected to raise gross proceeds of up to approximately RM44.27 million.

The proceeds will be used as working capital for TAFI which may include general administrative expenses and operating expenses for the group’s development projects under its property development business as well as payments to suppliers and for purchase of materials for its businesses.

New shareholders’ mandate to lift TAFI’s future prospects

Meanwhile, TAFI group chief executive officer Datuk Seri Bryan Wong said that the new shareholders mandate for RRPTs will enable the group to widen its market and revenue base by tapping into opportunities to supply products such as furniture and construction-related materials on either project or trading basis to related companies of the controlling shareholders of TAFI.

Wong also said that the management is confident and positive about the future and growth prospects of the group and anticipate that the warrant holders will eventually exercise the warrants to increase their equity participation in TAFI.

“The group will continue to grow the revenue and profit of its furniture business by tendering for more local government and non-government furniture supply contracts and also via marketing of furniture and related products via the strategic partnership with Signature Group and OMG Free Reno Sdn Bhd,” he said.

Wong also said that TAFI’s property development business is progressing well and the company will continue to seek and secure more joint ventures to further grow TAFI’s property development business

He added that TAFI currently has estimated total gross development value in excess of RM1 billion from existing property development joint ventures which have been announced via Bursa filings previously.

“We expect all the necessary approvals for our maiden mixed-development project in Habu in the State of Pahang will be forthcoming in due course and we expect to commence construction works for the Habu mixed-development project in the fourth quarter of 2022”, said Wong.

Looking ahead, Wong noted that the group is working towards securing more construction contracts to further grow the revenue stream of TAFI from construction contracts.

The group kick-started its construction business in November last year via TAFI’s wholly-owned unit, TAFI Home & Office Sdn Bhd. and has to date secured construction contracts in excess of RM30 million which have been announced via press releases filed with Bursa previously.

TAFI's share price closed down four sen or 1.52% at RM2.60, giving the company a market capitalisation of about RM322.23 million.

Edited by Lam Jian Wyn

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