TAFI approves proposed free issue of shares, warrants and new shareholder mandate
KUALA LUMPUR (January 21): TAFI Industries Bhd announced that it has received approval for the proposed free issue of 252.95 million new ordinary shares of the company on the basis of two free shares for each existing ordinary share held at the date of enjoyment.
The furniture maker also received approval for the proposed free issue of up to 63.24 million warrants on the basis of one warrant for two existing TAFI shares held on the vesting date.
In addition, the company received approval for the proposed new shareholder mandate for recurring related party transactions (RPTs) of a business or commercial nature.
The three ordinary resolutions set out in the notice of extraordinary general meeting (EGM) of January 6 were tabled and approved at the EGM held on Friday, TAFI said in a press release.
All resolutions declared by TAFI were voted on and duly adopted at the EGM, with the poll results validated by independent scrutineers, Quantegic Services Sdn Bhd.
TAFI said the free share issue was undertaken to reward the company’s shareholders, improve trading liquidity and tradability of TAFI shares, and make free shares more affordable in order to attract a wider group of people. shareholders and public investors.
The exercise price for the free issue of up to 63.24 million five-year warrants has been set at 70 sen per warrant, representing a discount of 15.75 sen or 18.37% over the theoretical ex-bonus price (TEBP) of TAFI shares of 85.75 sen, calculated on the basis of the five-day volume-weighted average price (VWAP) until January 20, 2022 included.
TAFI said it will announce the eligibility date and issue date in due course.
As for the free issue of warrants, TAFI noted that it was undertaken to reward the company’s shareholders by allowing them to participate in the company’s convertible securities which are tradable in Bursa Securities without incurring any fees.
In addition, TAFI stated that it is to provide existing shareholders of the company with the opportunity to increase their equity stake in the company through the exercise of warrants at a pre-determined price during the term of the warrants. subscription.
In addition to this, TAFI said it is to allow the company’s existing shareholders to benefit from any potential capital appreciation of the warrants, as well as to help strengthen the company’s capital base and the shareholders’ funds as well as potentially providing additional working capital for the group as the warrants are exercised.
Based on the exercise price of 70 sen per warrant and in the event that the warrants are fully exercised, TAFI is expected to generate 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 as part of its property development activity as well as payments to suppliers and for the purchase materials for its activities.
A new shareholder mandate to improve TAFI’s future prospects
Meanwhile, TAFI Group Chief Executive Datuk Seri Bryan Wong said the new shareholder mandate for RRPTs will enable the group to expand its market and revenue base by exploiting opportunities to provide products such as furniture and building materials on the project or trade. to affiliated companies of TAFI’s controlling shareholders.
Wong also said that management is confident and positive about the future and growth prospects of the group and anticipates that warrant holders will eventually exercise the warrants to increase their equity stake in TAFI.
“The Group will continue to grow revenues and profits from its furniture business by bidding for more local government and non-government furniture supply contracts and also through the marketing of furniture and related products through 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 develop TAFI’s property development business.
He added that TAFI currently estimated the total gross value of the development at over RM1 billion from the existing property development joint ventures which were previously announced through Bursa filings.
“We anticipate that all necessary approvals for our first mixed development project at Habu in Pahang State will be obtained in due course and we expect to commence construction works on the Habu mixed development project in the fourth quarter of 2022,” Wang said.
Looking ahead, Wong noted that the group is working to secure more construction contracts to further increase TAFI’s revenue stream from construction contracts.
The group launched its construction business in November last year through TAFI’s wholly owned unit, TAFI Home & Office Sdn Bhd. and has to date secured construction contracts worth over RM30 million which were announced via press releases filed with Bursa previously.
TAFI’s share price closed four sen or 1.52% lower at RM2.60, giving the company a market capitalization of around RM322.23 million.