Pecca proposes 3-for-1 bonus issue for shareholders

by TMR / pic source

PECCA Group Bhd has proposed to undertake a bonus issue of 564 million new ordinary shares in Pecca on the basis of 3 bonus shares for every share held. 

In a filing to Bursa Malaysia yesterday, Pecca said in addition to rewarding its shareholders for their loyalty and continued support, the exercise will serve to provide existing shareholders with greater equity participation while maintaining their percentage of equity shareholding. 

This will also potentially result in the improvement of the trading liquidity of Pecca’s shares by increasing the number of shares in issue, which results in its shares being more affordable and encouraging greater participation by a wider group of public shareholders and investors.

The company added that its reserves and total net assets will be maintained as the proposed bonus issue will be implemented via the adoption of the enhanced bonus issue framework without capitalisation of the company’s reserves. 

“As of Sept 30, 2021, Pecca’s cash and cash equivalent stands at RM64.35 million, which will be utilised through value-accretive efforts and seek suitable merger and acquisition or joint-venture opportunities that can enhance the earnings visibility of the company moving forward,” Pecca said. 

It added leather and healthcare businesses will continue to be the two core engines that generate revenue for the firm.

The actual number of bonus shares to be issued pursuant to the proposed bonus issue will be based on the total number of shares of Pecca in issue on the entitlement date, which will be determined and announced by the board at a later date. 

It expects to complete the proposed bonus issue by the first quarter of 2022, after obtaining shareholders’ approvals. 

With a market capitalisation of RM637 million, Pecca is primarily involved in the manufacturing of leather upholstery for car seat covers and supply of leather cut pieces to the automotive leather upholstery industry. 

It is the largest automotive leather upholstery player in Malaysia’s original equipment manufacturer and pre-delivery inspection passenger vehicle segments, and it also serves export markets such as Singapore, the US, the Netherlands, Australia, New Zealand, the UK, Ireland and China.