YTL Group said the exercise price to convert the warrant into mother shares will be set at a discount to the prevailing share price.
PETALING JAYA: YTL Corp Bhd and its subsidiary, YTL Power International Bhd
, have proposed free warrants for shareholders that could raise up to RM7.5bil cumulatively, assuming full conversion.
Cash raised from the conversions will be partly used by respective companies to fund business expansion and to pare down debt. According to a statement by YTL Group yesterday, one free warrant will be issued for every five ordinary shares held.
The warrants must be converted into mother shares within three years, failing which the warrants will expire.
YTL Group said the exercise price to convert the warrant into mother shares will be set at a discount to the prevailing share price.
In the case of YTL Corp, the discount is about 37% from Jan 22’s average share price of RM2.39. The exercise price is set at RM1.50 per share.
Assuming full exercise of the warrants, the gross proceeds are expected at about RM3.31bil and RM3.4bil under the Minimum Scenario and Maximum Scenario, respectively.
As for YTL Power, the discount is about 40%, based on Jan 22’s average share price of RM4.06. The exercise price to convert the free warrants is RM2.45 per share.
Under the Minimum Scenario, YTL Power expects gross proceeds of RM4.02bil, while under the Maximum Scenario, it is expected at RM4.1bil.
YTL Group executive chairman Tan Sri Francis Yeoh Sock Ping said the free warrants are part of the group’s ongoing track record of rewarding long-term shareholders.
“As with other distributions and instruments we have issued previously over the past decades, we believe this distribution of free warrants is the most appropriate way to reward shareholders at this point of our next growth and expansion cycle.”
The group also said that shareholders will have the opportunity to both increase their equity participation and further participate in the future growth of the respective companies when the warrants are exercised.
YTL Corp intends to use proceeds raised from the exercise of warrants for new projects and investments and to pare down borrowings, as well as to exercise its pro rata share of warrants issued by YTL Power.
YTL Power is the utilities arm of the YTL Group.
This will enable YTL Corp to maintain its equity interest in YTL Power and to continue to participate in its future growth and expansion.
Meanwhile, YTL Power plans to use proceeds raised from the exercise of warrants to fund the equity portion of future investments, focusing on businesses, assets and activities that may be complementary or synergistic to its existing businesses.
“The proposals will provide YTL Corp and YTL Power with additional funds when the respective warrants are exercised over their tenure and will also strengthen the respective capital bases of YTL Corp and YTL Power via the increase in shareholders’ funds upon the exercise of the warrants, providing greater flexibility in terms of the options available to meet future funding requirements,” according to YTL Group.
The issuance of free warrants by YTL Corp and YTL Power will be subject to approval from Bursa Malaysia and shareholders’ approval at respective extraordinary general meetings to be convened.
Barring any unforeseen circumstances and subject to all required approvals being obtained, the proposed issuance of free warrants is expected to be completed by the second quarter of 2025.