Malaysia's largest cocoa processor Guan Chong Bhd today announced a corporate exercise to issue bonus shares together with new warrants.

This will be on the basis of one bonus share for every three Guan Chong shares held and one free warrant for every four Guan Chong shares held at an entitlement date to be determined later.

The exercise will see the issuance of 80 million new ordinary shares of RM0.25 par and 60 million five-year warrants, Johor-based Guan Chong said in a statement.

While the bonus shares will effectively increase Guan Chong's share capital to RM80 million, comprising 320 million shares of RM0.25 par from RM240 million shares currently, the five-year warrants are expected to eventually increase the share capital by up to RM15 million, assuming the full exercise of the warrants.

'The objectives of the exercise are not only to increase the share capital base of Guan Chong but also to reward the shareholders for their continuous support through greater equity participation in the company,' said managing director and chief executive officer Brandon Tay Hoe Lian.

'The warrants are ideal for our working capital needs as and when they are converted over the next five years. Besides, the warrants provide an alternative for potential investors to gain exposure to Guan Chong''s growth,' he said.

As the exercise price of the warrants has yet to be decided by the board of directors, Tay said the expected maximum future proceeds from the warrants exercise will be announced later.

The corporate exercise is subject to shareholders' approval during an extraordinary general meeting to be convened.

OSK Investment Bank is the adviser for the corporate exercise. -- Bernama