Ancom proposes dividend-in-specie of Nylex shares

The firm has also proposed share split involving the subdivision of every 1 Ancom share into 3 Ancom shares 

By NUR HANANI AZMAN 

ANCOM Bhd has proposed dividend-in-specie through distribution of up to 18.4 million ordinary shares in Nylex (M) Bhd on the basis of one Nylex share for every 20 ordinary Ancom shares held (proposed dividend-in-specie). 

The South-East Asia’s leading fully integrated chemicals group has also proposed share split involving the subdivision of every one Ancom share into three Ancom shares (proposed share split). 

According to Ancom, the respective entitlement date of both exercises shall be determined by the board at a later date. The proposals are not inter-conditional upon one another. However, the intention is for the proposed share split to be implemented upon the completion of the proposed dividend-in-specie. 

Ancom group CEO Lee Cheun Wei said barring any unforeseen circumstances, the proposals are expected to be completed by the second quarter of 2022, while the development at Ancom has been very encouraging with progress moving along very well for us on multiple fronts. 

“Operationally, we are catching tailwinds in both our core chemical segments on the back of new products, favourable regulatory shifts, and higher commodity prices. On the corporate side, we recently concluded the acquisition of Nylex’s businesses, giving us full control of the industrial chemicals arm. 

“In line with these positive developments, we have decided to pay out dividend-in-specie to our shareholders, giving them an opportunity to benefit from the future of Nylex as and when it acquires a new venture. The gesture is our way of thanking them for their unwavering support throughout the years,” he said in a statement yesterday. 

Ancom on Jan 26, 2022, finalised the acquisition of all assets and liabilities of Nylex for a purchase consideration of RM179.3 million to be satisfied via a combination of cash and new issuance of 31.1 million new Ancom shares. 

The new Ancom shares are set to be listed on March 24, 2022 which will bring the total outstanding shares of Ancom to 284.6 million. Nylex, meanwhile, is now classified as a Cash Company. 

Under the proposals, the minimum scenario assumes an enlarged Ancom capital base of 284.6 million shares post-issuance of the 31.1 million new Ancom shares for the acquisition of Nylex businesses, while the maximum scenario further assumes the resale of treasury shares, full exercise of both out-standing warrants and ESOS (employee share option scheme) which would lead to an enlarged base of 367.1 million shares. 

Lee said for the proposed dividend-in-specie, Ancom will distribute 14.2 million Nylex shares under the minimum scenario, and up to 18.4 million Nylex shares under the maximum scenario. The former currently holds a 50.3% stake in Nylex, which is equivalent to 90.1 million Nylex shares. 

“The proposed share split, on the other hand, may result in improved trading liquidity of Ancom and potentially lowering the price volatility of our stock by increasing the number of shares. On top of that, the relative affordability per unit after the split could induce greater participation of a wider range of shareholders and investors as well. 

“For the proposed share split, Ancom’s enlarged issued share capital is set to expand to 881.4 million shares under the minimum scenario and up to 1.1 billion shares under the maximum scenario,” he added. 

“We are confident of our future that is augmented by the consolidation of Nylex businesses, alongside expansion plans in motion that include the recent acquisition of a livestock chemicals company and the imminent completion of the new manufacturing plant for agricultural chemicals,” Lee said.