YTL Corporation Bhd (YTL Corp) has proposed a bonus issue of up to 2.27 billion warrants, offering one warrant for every five existing shares held by its shareholders.

The warrants, which will be issued at no cost to shareholders, have an exercise price of RM1.50 per warrant – a 44% discount to the five-day volume weighted average price of YTL Corp’s shares, which stands at RM2.661.

Shareholders will have the flexibility to decide when to exercise their warrants during the three-year tenure, benefiting from potential future growth in the company.

As of January 3, 2025, YTL Corp has an issued share capital of approximately RM3.51 billion, comprising 11.1 billion YTL Corp shares, including 58.6 million treasury shares.

While the bonus issue does not raise immediate funds, it provides YTL Corp with the potential to secure up to RM3.4 billion in gross proceeds if the warrants are fully exercised.

These funds will be used to repay borrowings, particularly the RM46 billion in total borrowings the company had as of September 2024, which includes capital raised for acquisitions, investments, and operational needs.

In addition, the proceeds will support YTL Corp’s future projects, acquisitions, and investments, including potential ventures in its core business areas such as utilities, construction, and property development.

While the company has not yet identified specific projects, it will continue to evaluate opportunities that complement its existing business.

The bonus issue is also tied to YTL Power International Bhd’s proposed bonus issue of warrants.

YTL Corp will exercise its entitlement to around 900 million YTL Power warrants, which will be funded by proceeds from the bonus issue.

The entitlement date will be announced later, and the entire bonus issue is expected to be completed by the second quarter of 2025.

CIMB Investment Bank has been appointed as the principal adviser for this corporate action. — TMR