KUALA LUMPUR: Straits Energy Resources Bhd has proposed to consolidate every two existing shares held into one consolidated share.
In a filing with Bursa Malaysia, the oil bunkering player said the issued share capital of the group was RM138.84mil comprising 882.18 million shares as at March 25.
In addition, as at March 25, the company has 143.2 million outstanding warrants 2017/2022 in the company.
“Upon completion of the proposed share consolidation, the resultant issued share capital of Straits will be RM139.84mil comprising 441.09 million consolidated shares under the minimum scenario, while the resultant issued share capital of straits will be approximately RM156.31mil comprising 512.69 million consolidated shares under the maximum scenario,” it said.
As at March 25, Straits had a total of 882.18 million issued shares, and the last trading price was closed at 14.5 sen per share.
“In view of the large share base and low trading price, the proposed share consolidation is expected to enhance the company's share capital structure by consolidating the existing Straits shares, which will result in a reduction in the number of shares available in the market,” Straits said.
It added that the consolidation would also lead to a reduction in the number of shares available in the market and correspondingly, increase the reference/ trading prices of the shares. Accordingly, this may reduce the volatility of the trading price of the shares.
“From a financial statement perspective, the proposed share consolidation is expected to increase net asset per share of straits together with its subsidiaries without affecting the total market value of shares and share capital, and shareholders' percentage shareholding in the company.
“Premised on the above, the board considers the proposed share consolidation is in the best interest of the company,” it said.