MAIN Market-listed tiles manufacturer and Information Technology company YB Ventures Bhd (formerly Yi-Lai Bhd) has proposed to undertake a bonus issue of up to 749.32 million free warrants (maximum scenario) on the basis of one warrant for every two existing ordinary shares held on an entitlement date to be determined later.
YB Ventures’ issued share capital as of Dec 31, 2021 – being the latest practicable date (LPD) – is RM110.75 mil comprising 291.31 million shares, out of which 808,616 are treasury shares.
Under the minimum scenario where none of the treasury shares and outstanding irredeemable convertible unsecured loan stocks (ICULS) are converted, 145.25 million warrants will be issued (minimum scenario).
For the purpose of illustration and based on an indicative exercise price of 40 sen, the group will raise gross proceeds of approximately RM58.1 mil and RM299.73 mil under both maximum and minimum scenario respectively.
“The group views this as an attractive corporate exercise to reward our loyal shareholders by enabling them to have greater participation in a derivative of YB Ventures without incurring any cost,” commented YB Ventures’ executive director Datuk Au Yee Boon.
“On the other hand, the three-year convertible warrants upon being exercised will provide us with additional working capital and allow the group to obtain proceeds without incurring interest expenses as compared to bank borrowings.”
Commenting on the group’s prospects going forward, Au is confident of maintaining a profitable year for FY2021 despite the impact from the MCO 3.0 (full movement control order).
“Our business operation is back to its full force after all our operational workers have completed their second dose of vaccine which is in line with the guidelines set out by the Health Ministry,” Au pointed out.
“The direction going forward for the group will be to scout for merger and acquisition (M&A) opportunities that arise from this COVID-19 pandemic. The low interest-rate environment and our sturdy balance sheet put us in a good position on the negotiation table with potential candidates.”
The group has cash and bank balances of RM122 mil with RM21 mil in other investments as well as zero borrowings in its balance sheet as of September 2021.
“We hope to finalise at least one M&A deal in 1H 2022. The deal will create value for our shareholders by generating sustainable cash flow to the group,” added Au.
YB Ventures is the exclusive manufacturer of the Talos Living Tiles and ALPHA TILES which are major household names in construction, renovation and interior decoration. The company also produces tiles of private labels for its OEM (original equipment manufacturer) customers.
At the close of yesterday’s (Jan 24) trading, YB Ventures was up 3 sen or 6.45% with 4.97 million shares traded, thus valuing the company at RM144 mil. – Jan 25, 2022
