SHAREHOLDERS of Techbond Group Bhd, a home-grown pioneer in the manufacturing of industrial adhesives and sealants, have approved a bonus issue exercise of up to 431.25 million new shares on the basis of five bonus shares for every four existing Techbond shares.
The decision was reached at the company’s extraordinary general meeting (EGM) held today.
“The group is continuously seeking avenues in addition to dividends to reward our shareholders for their patience and trust as we grow the business,” Techbond managing director Lee Seng Thye commented after the conclusion of the company’s EGM.
To recap, Techbond paid a maiden dividend of 2 sen/share in FY2020, representing a 42.9% payout.
“We have a formal dividend policy of distributing up to 30% of our net profit and non-controlling interest,” Lee pointed out.
“Following the shareholders’ approval of the proposed bonus issue, we expect the liquidity of our shares to improve, thus encouraging greater participation by investors which in turn can lead to the widening of our shareholder base.”
Moving forward, Techbond will continue to focus on its expansion plans as well as research & development (R&D) activities which is crucial to expand the company’s product range, meet the changing needs of its customers and ultimately, strengthen its competitive advantages.
On a related note, Lee said Techbond’s collaboration with the Malaysian Palm Oil Board (MPOB) in pioneering palm oil-based industrial adhesives using locally sourced and sustainable palm oil has continued to make good progress.
The prototype has passed the stringent industry tests and the company is currently in the design for manufacturability stage with discussions underway with potential partners at the same time.
“We are excited by this project based on the huge market potential,” enthused Lee. “All-in-all, the prospects for the group remains promising, underpinned by our expansion plans which is further backed by our robust balance sheet,” added Lee.
Barring any unforeseen circumstances and subject to the approvals of the relevant authorities, Techbond’s bonus issue exercise is due for completion by 1Q 2021.
At the close of the morning trading session, Techbond was down 2 sen or 1.21% to RM1.63 with 1.74 million shares traded, thus valuing the company at RM384 mil. – March 12, 2021
