Digistar proposes one-for-four bonus warrants

KUALA LUMPUR (May 3): Digistar Corp Bhd plans to undertake a bonus issue of up to 113.45 million warrants, on the basis of one warrant D for every four existing ordinary shares, to reward shareholders.

The bonus issue will enable them to participate in a derivative of the company without incurring any costs, and provide them an opportunity to further increase their equity participation by exercising the warrants at a pre-determined price over the five-year tenure of the warrants, said Digistar in a bourse filing.

Shareholders may also benefit from a potential capital gain in the event of share price appreciation through the exercise of the warrants, said the information and communications technology firm.

The bonus issue will strengthen Digistar’s financial position and capital base, as they will potentially provide the company with additional working capital as and when the warrants are exercised.

Based on exercise price of six sen apiece for the warrants, the company is expected to raise gross proceeds of up to approximately RM6.81 million if they’re fully exercised.

The proposed bonus issue is expected to be completed by the second quarter of 2023, Digistar said.

The stock closed half a sen or 6.25% lower at 7.5 sen on Wednesday (May 3), valuing the group at RM31.91 million.