KUALA LUMPUR: AmInvestment Research has maintained its hold recommendation and fair value of RM1.39 a share on Only World Group Holdings Bhd on its proposed bonus issue of 133.55 million warrants.
The issuance is based on one warrant for every two existing OWG shares held with a tenure of five years and an exercise price to be determined at a later date.
"The issue of the 133.55mil warrants based on the indicative exercise price of RM0.80/share is expected to raise RM106.84mil. According to its announcement to Bursa Malaysia, the proceeds would be used for working capital," said AmInvestment.
"We gather that there will be 10-15 new kiosks within the Twentieth Century Fox World theme park which is expected to be completed within 1H2019. We understand that currently OWG is operating 23 food service outlets (FSO) and 4 family attractions in Genting, and 13 FSOs and 14 family attractions in Komtar Tower."
It added that the issue of the warrants is EPS-dilutive and the group's EPS would decline by 25.8% as the increase in share base would more than offset the interest income from the warrants proceeds.
"In the long term, the dilutive impact may be minimised by the returns from the investment of the warrants proceeds."
From - The Star Online