Announcement Details :
1. INTRODUCTION
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On behalf of the Company, AmInvestment Bank Berhad, a member of the AmInvestment Bank Group, ("AmInvestment Bank") wishes to announce that the Company is proposing the following:-
(a) bonus issue of up to 110,000,000 new ordinary shares of RM0.50 each ("Shares") ("Bonus Shares") to be credited as fully paid-up on the basis of one (1) Bonus Share for every two (2) existing Shares held at an entitlement date to be determined later ("Entitlement Date")
("Proposed Bonus Issue"); and
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(b) share buyback scheme of QL of up to 10% of its own issued and paid-up Shares through its appointed stockbrokers ("Proposed
Share Buy-Back"). The Proposed Bonus Issue and the Proposed Share Buy-Back are not inter-conditional.
2. DETAILS OF THE PROPOSED BONUS ISSUE
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The Company proposes to implement a bonus issue of up to 110,000,000 Bonus Shares to its shareholders on the basis of one (1) Bonus Share for every two (2) existing Shares held, credited as fully paid-up, on the Entitlement Date.
The actual number of Bonus Issue Shares to be issued will depend on the issued and paid-up share capital of the Company as at the Entitlement Date, after taking into consideration the issued and paid-up share capital of QL (as at 31 March 2008, the figure stood at RM110,000,000 comprising 220,000,000 Shares) as well as such Shares purchased by QL under the Proposed Share Buy-Back (if any).
In determining shareholders’ entitlements to the Proposed Bonus Issue, fractional entitlements that may arise from the Proposed Bonus Issue shall be dealt with in such manner as the Board of Directors of QL (“Board”) shall in their absolute discretion think expedient and in the interest of the Company.
The Entitlement Date will be determined at a later date upon the receipt of all relevant approvals for the Proposed Bonus Issue. The Proposed Bonus Issue is expected to be completed by the second quarter of calendar year 2008. For information purposes, the Proposed Bonus Issue is not intended to be implemented in stages over a period of time.
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The Proposed Bonus Issue will be implemented by capitalising up to RM40,000,000 from the share premium account and RM15,000,000 from the retained earnings of the Company in the manner set out in Table 1. Based on the latest audited consolidated results of QL and its subsidiaries (“QL Group”) for the financial year ended (“FYE”) 31 March 2007, the retained earnings and share premium account of QL stood at RM147,463,000 and RM40,346,000 respectively.
The Board confirms that based on the Company’s latest audited results for the FYE 31 March 2007 and its latest unaudited quarterly report ended 31 December 2007, the Company’s share premium and retained earnings required for capitalization of the Proposed Bonus Issue are unimpaired by any losses on a consolidated basis.
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The Bonus Shares shall, upon allotment and issue, rank pari passu in all respects with the then existing Shares except that they should not be entitled to any dividends, rights, allotments and/or other distributions which may be declared, made or paid to shareholders, of which the entitlement date precedes the date of allotment of the Bonus Shares.
2.1 Basis and Number of Bonus Shares 2.2 Capitalisation of Reserves 2.3 Ranking of the Bonus Shares
3. DETAILS OF THE PROPOSED SHARE BUY-BACK
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The Proposed Share Buy-Back will allow the Company to purchase up to ten percent (10%) of QL’s issued and paid-up share capital at the point of purchase on Bursa Securities through the Company’s appointed stockbroker(s).
For illustrative purposes, based on QL’s issued and paid-up share capital as at 31 March 2008, the Proposed Share Buy-Back will allow the Company to purchase the maximum number of Shares as set out in Table 2.
The mandate for the Proposed Share Buy-Back will be effective immediately after the passing of the ordinary resolution pertaining to the Proposed Share Buy-Back at the forthcoming EGM, and will be in force until:-
3.1 Details of the Proposed Share Buy-Back
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(a) the conclusion of our next AGM at which time the mandate shall lapse unless by ordinary resolution passed at that meeting the mandate is renewed either unconditionally or subject to conditions; or
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(b) the expiration of the period within which the next AGM is required by law to be held; or
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(c) the mandate is revoked or varied by ordinary resolution passed in a general meeting;
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The Proposed Share Buy-Back will be funded from the Company’s internally generated funds and/or borrowings and the maximum amount allocated will not exceed the sum of retained profits and share premium of QL (at company level) based on the latest audited financial statements available up to the date of any transaction pursuant to the Proposed Share Buy-Back.
The Proposed Share Buy-Back will allow QL’s Directors to exercise the power to purchase QL’s own Shares at any time within the abovementioned period.
(i) Funding
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In compliance with Bursa Securities’s Listing Requirements (“Listing Requirements”), the Company may only purchase the Shares on Bursa Securities at a price which is not more than fifteen percent (15%) above the weighted average market price of QL Shares for the five (5) market days immediately preceding the date(s) of any purchase(s).
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(iii) Treatment of Shares Purchased
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In accordance with Section 67A of the Act, the Board may deal with the Shares so purchased in the following manner:-
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(a) To cancel the Shares so purchased;
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(b) Retain the Shares so purchased as treasury shares for distribution as dividends to the shareholders and/or resell them on Bursa Securities and/or subsequently cancel the treasury shares;
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(c) Retain part of the Shares so purchased as treasury shares and cancel the remainder; or
(d) A combination of (a), (b) and (c) above.
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QL may only resell the treasury shares on Bursa Securities at a price which is:-
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(a) Not less than the weighted average market price for the Shares for the five (5) market days immediately preceding the date(s) of resale(s); or
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(b) at a discounted price of not more than 5% to the weighted average market price for the Shares for the five (5) market days immediately preceding the date(s) of the resale(s) provided that:-
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(i) The resale(s) takes place no earlier than thirty (30) days from the date(s) of purchase(s); and
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(ii) The resale(s) price is not less than the cost of purchase of the Shares being resold.
(iv) Resale Price
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(v) Regulatory and Listing Requirements
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The Board undertakes that the Proposed Share Buy-Back will be carried out in accordance with all relevant regulatory and listing requirements of the relevant authorities at the time of the purchase, including compliance with the public shareholding spread as required by the Listing Requirements of Bursa Securities.
(vi) Implication of the Malaysian Code on Takeovers and Mergers 1998 (“Code”)
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QL does not intend to undertake the Proposed Share Buy-Back such that it will trigger any obligation to undertake a mandatory offer pursuant to the Code. However, in the event an obligation to undertake a mandatory offer is expected to arise with respect to any parties resulting from the Proposed Share Buy-Back, the relevant parties shall make the necessary application to the Securities Commission for a waiver to undertake a mandatory offer pursuant to the Code prior to any buy-back of QL’s Shares that may trigger an obligation to undertake a mandatory offer under the Code.
4. RATIONALE FOR THE PROPOSALS
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The Proposed Bonus Issue will increase the share capital base of the Company which will better reflect the current scale of operations of the QL Group and reward its shareholders for their continuous support. In addition, the Proposed Bonus Issue is expected to improve the liquidity and marketability of QL’s shares traded on Bursa Malaysia Securities Berhad (“Bursa Securities”).
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(i) The Company is able to utilize its surplus financial resources, which is not immediately required for other uses to purchase its own shares from the market;
4.1 Rationale for the Proposed Bonus Issue 4.2 Rationale for the Proposed Share Buy-Back The rationale for the Proposed Share Buy-Back is as follows:-
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(ii) If the Shares purchased are subsequently cancelled, the earnings per share (“EPS”) of QL may be strengthened due to the reduction of the Company’s issued and paid-up share capital, (assuming all things remain equal) and if so the shareholders of the Company may enjoy an increase in the value of their investment in the Company;
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(iii) The Shares purchased can also be held as treasury shares and resold on Bursa Securities at a higher price with the intention of realizing a potential gain without affecting the total issued and paid-up share capital of the Company; and
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Treasury shares may also be distributed as share dividend to reward the shareholders of
the Company.
5. EFFECTS OF THE PROPOSALS
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The effects of the Proposed Bonus Issue and the Proposed Share Buy-Back are set out as below.
5.1 Share Capital
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The effects of the Proposals on the issued and paid-up share capital of the Company are set out in Table 2.
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The effects of the Proposals on the NA and gearing are set out in Table 3.
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Save for the dilution in EPS of the QL Group arising from the increase in the number of issued and paid-up share capital of the Company pursuant to the Proposed Bonus Issue, the Company does not expect any material effect on the earnings of the QL Group for the FYE 31 March 2008 and financial year ending 31 March 2009.
The effects, if any, on earnings from the Proposed Share Buy-Back is dependent on, inter-alia, the amount of Shares purchased, the effective funding cost or loss in interest income to the QL Group in financing these purchases and the proposed treatment of the Shares so purchased.
5.2 NA and Gearing 5.3 Earnings 5.4 Substantial Shareholders’ Interests
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The effects of the Proposals on the substantial shareholders' interest are set out in Table 4.
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The Proposals are not expected to have any material effect on the dividends to be declared by the Company, if any, for the FYE 31 March 2008 and the financial year ending 31 March 2009. The level of dividends to be declared for future financial years would be determined by the Board after taking into consideration the performance and cashflow position of the Group, as well as the prevailing economic conditions.
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The effects of the Proposed Share Buy-Back on QL’s public shareholding spread is set out in Table 5.
5.5 Dividends 5.6 Public Shareholding Spread
6. CONDITIONS TO THE PROPOSALS
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The Proposals are subject to the approvals of the following:-
a) Bursa Securities for the Proposed Bonus Issue and the listing of and quotation for the Bonus Shares on the Main Board of Bursa Securities;
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b) The approval of shareholders at an Extraordinary General Meeting ("EGM") to be convened for the Proposals; and
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c) The approval of any other relevant authorities, if required.
7. DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS
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None of the Directors and/or major shareholders of the Company and/or persons connected to them have any interest, either direct or indirect, in the Proposed Bonus Issue beyond their respective entitlements as shareholders of QL, for which all the existing shareholders are also entitled to.
Save for the inadvertent increase in the percentage of shareholding and/or voting rights of shareholders of the Company as a result of the Proposed Share Buy-Back, none of the Directors and/or major shareholders of the Company or persons connected to them have any interest, either direct or indirect in the Proposed Share Buy-Back or resale of treasury shares.
8. DIRECTORS' STATEMENT
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The Board, having considered all aspects of the Proposals, is of the opinion that the Proposals are in the best interest of the Company.
9. ADVISER
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AmInvestment Bank has been appointed as the Adviser to the Company in respect of the Proposals.
10. TIMING OF SUBMISSION TO AUTHORITIES
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The applications in respect of the Proposed Bonus Issue will be made to the relevant authorities within a period of one (1) month from the date of this announcement.
This announcement is dated 16 April 2008. |
