(Infocast News) China Vanguard Group (8156) has proposed a bonus share issue on the basis of one bonus share for every two existing shares held and a bonus warrant issue on the basis of one bonus warrant for every five existing shares held by qualifying shareholders.
Each bonus warrant will entitle the holder(s) thereof to subscribe for one new share at an initial exercise price of $1.33 per share at any time from 3 November 2006 for two years (i.e. up to and including 2 November 2008). $1.33 represents a 11.76% over $1.19, the last closing price of the stock.
Application will be made by the company to the Listing Committee of the Stock Exchange for the listing of, and permission to deal in the bonus shares, the bonus warrants and any new shares which may fall to be issued upon the exercise of the subscription rights attaching to the bonus warrants. 312.026 million bonus shares will be issued under the bonus share issue. Full exercise of the bonus warrants would result in the issue of a total of 124.8 million new shares, representing 11.76% of the issued share capital of the company as enlarged by the bonus shares and the new shares which may fall to be allotted under bonus warrant issue. Assuming the full exercise of the bonus warrants, the company would result in receipt of approximately $166 million before expenses. The company plans to apply the proceeds for general working capital.
The bonus warrants are proposed to be traded in board lots of 25,000 units.