Proposed Bonus Issue; And Proposed Transfer
Contents :
1. INTRODUCTION
On behalf of the Company, AmInvestment Bank Berhad (formerly known as AmMerchant 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 13,266,825 new ordinary shares of RM1.00 each in KKB ("Shares") ("Bonus Shares") credited as fully paid-up on the basis of one (1) Bonus Share for every four (4) existing Shares held on an entitlement date to be determined upon obtaining all the relevant approvals ("Entitlement Date") ("Proposed Bonus Issue"); and
(b) transfer of the listing of and quotation for the entire enlarged issued and paid-up share capital of KKB from the Second Board to the Main Board of Bursa Malaysia Securities Berhad ("Bursa Securities") ("Proposed Transfer").
The Proposed Bonus Issue and the Proposed Transfer shall hereinafter collectively be referred to as the "Proposals".
The Proposed Transfer is conditional upon the Proposed Bonus Issue and will be effected upon the completion of the Proposed Bonus Issue, subject to the approval of the relevant authorities. The Proposed Bonus Issue is not conditional upon the Proposed Transfer.
2. DETAILS OF THE PROPOSED BONUS ISSUE
2.1 Basis and Number of Bonus Shares
The Company proposes to implement a bonus issue of up to 13,266,825 Bonus Shares credited as fully paid-up to the shareholders of KKB on the basis of one (1) Bonus Share for every four (4) existing Shares held in KKB on the Entitlement Date.
Up to a maximum of 13,266,825 Bonus Shares may be issued based on the existing issued and paid-up share capital as at 29 December 2006 of RM48,280,000 comprising 48,280,000 Shares, and assuming all of the outstanding 4,787,300 options (“ESOS Options”) under the Company’s employees’ share option scheme (“ESOS’) (aggregate of outstanding and to be granted) are exercised prior to the Entitlement Date.
2.2 Capitalisation
The Proposed Bonus Issue will be implemented by capitalising up to RM13,266,825 from the retained earnings account of the Company. Based on the latest audited consolidated results as at 31 December 2006, the retained earnings account of KKB stood at RM28,509,333.
2.3 Ranking of the Bonus Shares
The Bonus Shares shall, upon allotment and issue, rank pari passu in all respects with the then existing Shares except that they shall not be entitled to any dividends to be declared for the financial year ended 31 December 2006 and 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.
2.4 Rationale for the Proposed Bonus Issue
The Proposed Bonus Issue is intended to increase the capital base of KKB to better reflect the Company's current and future scale of operations. In addition, the Proposed Bonus Issue will also reward KKB's shareholders for their continuous support and to facilitate the Proposed Transfer.
3. ADJUSTMENTS TO ESOS OPTIONS
Any necessary adjustments arising from the Proposed Bonus Issue pursuant to the terms of the unexercised ESOS Options will be governed by the Bye-laws for the ESOS. Hence, any adjustments required will only be determined on the Entitlement Date and will be effective from the commencement of the following market day (a day on which Bursa Securities is open for the trading in securities).
A notification to holders of the ESOS Options explaining the mechanism of any adjustments to the unexercised ESOS Options will be issued by the Company in accordance with the provisions of the Bye-laws immediately after finalisation of the necessary adjustments on the Entitlement Date.
4. PROPOSED TRANSFER
4.1 Details of the Proposed Transfer
Pursuant to the Policies and Guidelines on Issue/Offer of Securities issued by the Securities Commission ("SC"), a company which is currently listed on the Second Board of Bursa Securities may seek a transfer to the Main Board of Bursa Securities if it fulfils the Main Board listing requirements, stating inter-alia, the following:-
(i) The applicant must have been listed on the Second Board for at least 1 year;
(ii) The applicant must meet the Main Board listing requirements with respect to issued and paid-up capital of at least RM60,000,000;
(iii) The applicant must meet the Main Board historical profit track record test, i.e. an aggregate profit after tax of not less than RM30 million in 3 to 5 financial years, and a profit after tax of not less than RM8 million in the most recent financial year; and
(iv) The applicant must meet the public shareholding spread requirement whereby at least 25% of its issued and paid-up share capital are in the hands of a minimum of 1,000 public shareholders holding not less than 100 Shares each.
KKB is in compliance/ will be in compliance with the above requirements:-
(i) KKB was listed on the Second Board of Bursa Securities on 9 November 1994. Hence, the Company has been listed for over 12 years as at the date of this announcement;
(ii) Upon completion of the Proposed Bonus Issue, KKB’s enlarged issued and paid-up share capital will be sufficient to meet the minimum requirement of RM60,000,000;
(iii) For the financial year ended 31 December 2006, KKB achieved an audited consolidated profit after tax of approximately RM11.9 million whilst its aggregate audited consolidated profit after tax and minority interest for the past five (5) financial years ended 31 December 2002 to 31 December 2006 amounts to approximately RM33.4 million. Hence, it has also met the Main Board historical profit track record test; and
(iv) Based on KKB's public shareholding spread analysis as per its Record of Depositors as at 29 December 2006, approximately 37.25% of KKB's issued and paid-up share capital were in the hands of 2,018 public shareholders holding not less than 100 Shares each.
Based on the foregoing, KKB will be eligible for the Proposed Transfer upon completion of the Proposed Bonus Issue. The Company proposes to implement the Proposed Transfer upon completion of the Proposed Bonus Issue.
4.2 Rationale for the Proposed Transfer
The Proposed Transfer will enable the following objective of KKB to be fulfilled:-
(i) to further enhance KKB’s credibility, standing and appeal amongst investors, specifically institutional investors;
(ii) to enhance the confidence of KKB’s customers, suppliers and employees in KKB Group as well as further strengthen KKB’s profile among its bankers; and
(iii) to reflect the continuous growth of the Company.
5. EFFECTS OF THE PROPOSALS
The Proposed Transfer will not have any material effect on our share capital, Net Assets (“NA”) and gearing, earnings, substantial shareholders’ interest and dividends. The effects of the Proposed Bonus Issue are set out below:-
5.1 Share Capital
The effects of the Proposed Bonus Issue on the issued and paid-up share capital of the Company are set out in Table 1.
5.2 Net Assets (“NA”) and Gearing
The effects of the Proposed Bonus Issue on the NA and gearing are set out in Table 2.
5.3 Earnings
Save for the dilution in the earnings per share of the KKB 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 Proposed Bonus Issue is not expected to have any material effect on the earnings of the KKB Group for the financial year ending 31 December 2007.
5.4 Substantial Shareholders’ Interest
The Proposed Bonus Issue will not have any effect on the shareholdings of the substantial shareholders except for the proportionate increase in the number of Shares held.
5.5 Dividends
KKB has paid a special tax-exempt interim dividend of 10 sen per Share in respect of the financial year ended 31 December 2006.
The Board has recommended, subject to obtaining the approval of its shareholders at the forthcoming annual general meeting, a final dividend of 5 sen per Share, tax exempt, in respect of the financial year ended 31 December 2006.
The Proposed Bonus Issue is not expected to have any material effect on the dividends to be declared by the Company, if any, for the financial year ending 31 December 2007. The level of dividends to be declared for future financial years would be determined by the Board after taking into consideration the performance of the Group and its cashflow position, as well as the prevailing economic conditions.
6. CONDITIONS TO THE PROPOSALS
The Proposed Bonus Issue is subject to the approvals of the following:- (a) Bursa Securities for the listing of and quotation for the Bonus Shares; and
(b) The approval of KKB shareholders at the forthcoming Extraordinary General Meeting to be convened; and (c) The approval of any other relevant authorities, if required.
The Proposed Transfer is subject to the approvals of the following:-
(a) Bursa Securities for the transfer of the listing of and quotation for the entire enlarged issued and paid-up share capital of KKB to the Main Board of Bursa Securities; and
(b) The SC.
The Proposed Transfer is conditional upon the Proposed Bonus Issue and will be effected upon the completion of the Proposed Bonus Issue, subject to the approval of the relevant authorities. The Proposed Bonus Issue is not conditional upon the Proposed Transfer.
7. DIRECTORS' AND MAJOR SHAREHOLDERS' INTERESTS
None of the Directors and/or major shareholders or persons connected to them have any interest, direct or indirect, in the Proposals beyond their respective entitlements as shareholders of KKB under the Proposed Bonus Issue, for which all the existing shareholders of KKB are also entitled to.
8. DIRECTORS' STATEMENT
After due consideration of all aspects of the Proposals, the Directors of KKB are of the opinion that the Proposals are in the best interest of the Company.
9. ADVISER
AmInvestment Bank has been appointed as the Adviser in respect of the Proposals.
10. TIMING OF SUBMISSION TO AUTHORITIES
The relevant applications in respect of the Proposals will be made to the authorities within a period of one (1) months from the date of this announcement.
This announcement is dated 21 March 2007.
Announcement Info
| Company Name |
KKB ENGINEERING BERHAD |
| Stock Name |
KKB |
| Date Announced |
21 Mar 2007 |
| Category |
General Announcement |
| Reference No |
MM-070320-41092 |
Attachments
- KKB210307_table.doc (Size: 619,520 bytes)
