KUALA LUMPUR (March 13): JAG Bhd, whose share price has risen 15% year to date, has proposed a bonus issue of 125.36 million new shares on the basis of one bonus share for every five existing shares held.

The waste management solutions provider is also planning a bonus issue of up to 376.07 million free warrants on the basis of three warrants for every five existing shares held.

In a filing with Bursa Malaysia on Wednesday, the company said the bonus issue of both the new shares and warrants are intended to reward existing shareholders.

The bonus shares will be issued as fully paid, at no consideration and without capitalisation of the company’s reserves.

As at March 11, the issued share capital of JAG was RM203.17 million comprising 626.78 million shares including 11.94 million treasury shares.

For illustrative purposes, based on the five-day volume weighted average market price of JAG shares up to the latest practicable date of 32.64 sen, the theoretical ex-bonus share price will be approximately 27.2 sen.

Meanwhile, JAG said the proposed bonus issue of warrants will be implemented in a single issuance and is not intended to be implemented on a staggered basis over a period of time.

JAG said the illustrative exercise price is 26 sen per warrant. Based on this exercise price and in the event that the warrants are fully exercised, JAG is expected to raise gross proceeds of RM97.78 million.

"Such proceeds are expected to be used for the group’s working capital requirements, which include but not limited to payments for staff salaries and statutory contributions, operational and maintenance costs as well as other operating expenses for the group’s day-to-day operations such as upkeep of office premises, utilities and general administrative expenses as and when the proceeds are received by the company over the tenure of the warrants," it said.

Assuming full exercise of the warrants, the company’s enlarged issued share capital would be RM300.95 million comprising 1.13 billion shares, said JAG.

The exercise is expected to be completed by the second quarter of 2024. TA Securities is the principal adviser for both the proposed bonus issue of new shares and warrants.

Interestingly, JAG's net profit for the financial year ended Dec 31, 2023 (FY2023) tumbled 86.6% to RM1.29 million from the RM9.63 million it recorded in the previous year, as its total waste management segment — being the main profit contributor to the group — recorded lower revenue. This was on top of higher operating expenses and depreciation incurred from the property investment division.

Yearly revenue came in 22.3% lower at RM197.45 million, compared with RM254.09 in FY2022.

Shares of JAG finished unchanged at 34 sen on Wednesday, giving the company a market capitalisation of RM218.77 million.