WCT : Proposes RM600m bonds, 1-for-8 warrant issue -- Underperform

News Update

- WCT has proposed the issuance of RM600m nominal value of 5-year serial fixed rate bonds and 181.1m new warrants of which 121.1m will be offered to existing WCT shareholders on a 1-for-8 basis and 60m to senior management of WCT at an issue price to be determined later.

- Based on our calculation, at an indicative strike price of RM3.00, the new warrants will dilute WCT’s existing fully-diluted FY12/11 EPS by another 2.9% that is immaterial.

- We are neutral on the exercise that represents part and parcel of WCT’s day-to-day financial management.

- Fair value is RM2.30. Maintain Underperform