SHAH ALAM: Powerwell Holdings Bhd, a leading power distribution specialist manufacturing low voltage (LV) and medium voltage electrical distribution equipment, is undertaking a bonus issue of 116.1 million warrants in Powerwell, on the basis of 1 warrant for every 5 existing shares held on the entitlement date, to be determined and announced later.
The warrants shall have a tenure of 5 years.
The exercise is aimed at rewarding shareholders for their continued support and confidence in Powerwell as it continues its growth journey.
This initiative serves as an additional avenue to reward shareholders, complementing the group’s steady stream of dividends.
The bonus issue of warrants, which will be issued at no cost to shareholders, provides them with the option to further increase their equity participation in the group by exercising the warrants at a pre-determined price over the tenure of the Warrants.
Shareholders may also benefit from potential capital appreciation arising from the exercise of the warrants, premised on the future growth prospects of the group.
From Powerwell’s perspective, this exercise would potentially provide additional funds for the group’s working capital needs as and when the warrants are exercised, without incurring additional interest expense as compared to bank borrowings.
The board intends to fix the exercise price of the warrants at a premium of up to 50% to the 5-day volume-weighted average market price (VWAP) of Powerwell shares immediately preceding the price-fixing date.
In determining the appropriate premium, the board will take into consideration, amongst others, the group’s historical financial performance, the anticipated growth outlook of the electrical power distribution equipment industry, business expansion plans and the 5-year tenure of the warrants.
Having regard to these factors, the board intends to set an exercise price that appropriately reflects the group’s long-term growth potential over the tenure of the warrants.
For illustration purposes, the indicative exercise price of the warrants is assumed to be RM1.10, which represents a premium of approximately 38.45% to the 5-day VWAP of Powerwell shares up to and including the latest practicable date (LPD) of RM0.79.
The indicative exercise price should not be taken as an indication or reference to the actual exercise price, which will only be determined and announced by the board at a later date after taking into consideration the abovementioned factors.
The amount of proceeds to be raised would depend on the final exercise price and the actual number of warrants exercised during the exercise period.
As such, the exact quantum and timeframe for utilisation of the proceeds to be raised cannot be determined at this juncture.
The bonus issue of warrants is expected to be completed by Q4 of 2026, subject to receipt of all required approvals.
