Proposed Bonus Issues

PUBLIC PACKAGES HOLDINGS BERHAD

Company No. 198701003743 (162413-K)

("PPHB" or the "Company")

Subject

• : NEW ISSUE OF SECURITIES (CHAPTER 6 OF LISTING REQUIREMENTS) : BONUS ISSUE

  Description

• : PUBLIC PACKAGES HOLDINGS BERHAD ("PPHB" OR THE "COMPANY") - PROPOSED BONUS ISSUE

  Contents

• : On behalf of the Board of Directors of PPHB ("Board"), Affin Hwang Investment Bank Berhad ("Affin Hwang IB") wishes to announce that the Company proposes to undertake a bonus issue of up to 75,569,000 new ordinary shares in PPHB ("PPHB Share(s)" or "Share(s)") ("Bonus Share(s)") on the basis of two (2) Bonus Shares for every five (5) existing PPHB Shares held on an entitlement date to be determined and announced later ("Entitlement Date") ("Proposed Bonus Issue").

  Please refer to the attachment for further details.

  This announcement is dated 6 April 2022.

PUBLIC PACKAGES HOLDINGS BERHAD ("PPHB" OR THE "COMPANY")

PROPOSED BONUS ISSUE

• 1. INTRODUCTION

  On behalf of the board of directors of PPHB ("Board"), Affin Hwang Investment Bank Berhad ("Affin Hwang IB") wishes to announce that the Company proposes to undertake a bonus issue of up to 75,569,000 new ordinary shares in PPHB ("PPHB Share(s)" or "Share(s)") ("Bonus Share(s)") on the basis of two (2) Bonus Shares for every five (5) existing PPHB Shares held on an entitlement date to be determined and announced later ("Entitlement Date") ("Proposed Bonus Issue").

  Further details on the Proposed Bonus Issue are set out in the ensuing sections.

• 2. DETAILS OF THE PROPOSED BONUS ISSUE

• 2.1 Basis and number of Bonus Shares to be issued

  The Proposed Bonus Issue will entail the issuance of up to 75,569,000 Bonus Shares on the basis of two (2) Bonus Shares for every five (5) existing PPHB Shares held by the shareholders of PPHB whose names appear in the record of depositors of the Company as at the close of business on the Entitlement Date ("Entitled Shareholders").

  The basis of two (2) Bonus Shares for every five (5) existing PPHB Shares was determined after taking into consideration, amongst others, the following:

  • (i) the potential adjustments to the share price of PPHB Shares arising from the Proposed Bonus Issue; and

  • (ii) the enlarged number of PPHB Shares after the Proposed Bonus Issue.

  The Entitlement Date will be determined and announced at a later date after all the relevant approvals for the Proposed Bonus Issue have been obtained.

  As at 31 March 2022, being the latest practicable date ("LPD") prior to the date of this announcement, the issued share capital of the Company is RM94,787,179 comprising 188,916,001 PPHB Shares. The Company also has 6,500 outstanding options granted ("Outstanding Options") under its share issuance scheme comprising the employee share option scheme ("ESOS") and employee share grant scheme ("ESGS") established on 6 October 2017, which are vested and exercisable prior to the Entitlement Date. For avoidance of doubt, the Company does not intend to further grant any ESOS options and/or ESGS shares to any eligible directors and employees until the completion of the Proposed Bonus Issue. Further, the Company does not hold any treasury shares as at the LPD.

  The maximum number of Bonus Shares to be issued pursuant to the Proposed Bonus Issue was arrived at after taking into consideration the following:

  • (i) the issued share capital of the Company of RM94,787,179 comprising 188,916,001 PPHB Shares as at the LPD; and

  • (ii) assuming 6,500 Outstanding Options are exercised into new PPHB Shares prior to the Entitlement Date.

For illustrative purposes only, where applicable throughout this announcement, the pro forma effects of the Proposed Bonus Issue shall be based on the following scenarios:

Minimum Scenario

• : Assuming none of the 6,500 Outstanding Options are exercised into new PPHB Shares prior to the Entitlement Date

  Maximum Scenario

• : Assuming 6,500 Outstanding Options are exercised into new PPHB Shares prior to the Entitlement Date

Pursuant to the Minimum Scenario and Maximum Scenario, the Proposed Bonus Issue would entail the issuance of 75,566,400 Bonus Shares and up to 75,569,000 Bonus Shares respectively. Upon completion of the Proposed Bonus Issue, the number of issued shares of the Company will increase to 264,482,401 PPHB Shares and up to 264,491,501 PPHB Shares under the Minimum Scenario and Maximum Scenario respectively. The actual number of Bonus Issue to be issued will depend on the number of issued share of the Company on the Entitlement Date.

Fractional entitlements arising from the Proposed Bonus Issue, if any, will be disregarded, and/or dealt with by the Board in such manner as it may in its absolute discretion deem fit or expedient and in the best interest of the Company.

The Proposed Bonus Issue will not be implemented on a staggered basis.

There will be an adjustment to the market price of PPHB Shares listed and quoted on the Main Market of Bursa Malaysia Securities Berhad ("Bursa Securities") pursuant to the Proposed Bonus Issue. For illustrative purposes, the effects of the Proposed Bonus Issue on the share price of PPHB Shares are as follows:

Further, pursuant to Paragraph 6.30(1A) of the Main Market Listing Requirements of Bursa Securities ("Listing Requirements"), the share price adjusted for the Proposed Bonus Issue shall not be less than RM0.50 based on the daily VWAP of PPHB Shares during the three (3)-month period before the application date. Accordingly, the Board confirms that the Proposed Bonus Issue is and will be in compliance with Paragraph 6.30(1A) of the Listing Requirements.

2.2 Capitalisation of reserves

The Proposed Bonus Issue shall be wholly capitalised from the Company's retained profits account at RM0.50 for each Bonus Share.

The capitalisation from the Company's retained profits will increase the issued share capital of the Company to a level which better reflects the current size and scale of operations and assets employed of PPHB and its subsidiaries ("PPHB Group" or "Group").

For illustrative purposes, based on the Company's latest audited financial statements for the financial year ended ("FYE") 31 December 2021, the pro forma effects of the Proposed Bonus Issue on the retained profits of the Company are as follows:

Pursuant to Paragraph 6.30(2)(b) of the Listing Requirements, the Board confirms that the Company has sufficient reserves to cover the capitalisation of the Bonus Shares based on the latest audited financial statements of PPHB for the FYE 31 December 2021.

• 2.3 Ranking of the Bonus Shares

  The Bonus Shares shall, upon allotment and issuance, rank equally in all respects with the existing PPHB Shares, save and except that the Bonus Shares shall not be entitled to any dividends, rights, allotments and/or other distributions which may be declared, made or paid, where the entitlement date is before the date of allotment and issuance of the Bonus Shares.

  As PPHB Shares are prescribed securities under Section 14(5) of the Security Industry (Central Depositories) Act 1991, the Bonus Shares will be credited directly into the respective central depository system accounts of the Entitled Shareholders and no physical share certificates will be issued.

• 2.4 Listing of and quotation for the Bonus Shares

  An application will be made to Bursa Securities for the listing of and quotation for up to 75,569,000 Bonus Shares to be issued pursuant to the Proposed Bonus Issue on the Main Market of Bursa Securities.

  Upon obtaining all the necessary approvals as set out in Section 5 of this announcement, the Bonus Shares will be listed and quoted on the Main Market of Bursa Securities on the next market day after the Entitlement Date. The notices of allotment for the Bonus Shares will be issued and despatched to the Entitled Shareholders no later than four (4) market days after the date of listing of and quotation for the Bonus Shares, or such other period as may be prescribed by Bursa Securities.

• 3. RATIONALE FOR THE PROPOSED BONUS ISSUE

  The Proposed Bonus Issue serves to reward the existing shareholders of the Company for their loyalty and continued support to PPHB Group.

  After due consideration of the various options available, the Board is of the view that the Proposed Bonus Issue is an appropriate avenue for the Company to reward its shareholders as the Proposed Bonus Issue:

  • (i) will enable the existing shareholders to have greater participation in the equity of the Company in terms of the number of PPHB Shares held, whilst maintaining their percentage of equity interest in the Company; and

  • (ii) is expected to enhance the marketability and trading liquidity of PPHB Shares on the Main Market of Bursa Securities, thereby providing opportunity for greater participation from a broader range of investors.

• 4. EFFECTS OF THE PROPOSED BONUS ISSUE

• 4.1 Issued share capital

  For illustrative purposes, the pro forma effects of the Proposed Bonus Issue on the issued share capital of the Company as at the LPD, are as follows:

  Minimum Scenario	Maximum Scenario
  No. of Shares	RM'000	No. of Shares	RM'000
  Issued share capital as at the LPD PPHB Shares to be issued assuming full exercise of 6,500 Outstanding Options PPHB Shares to be issued pursuant to the Proposed Bonus Issue Enlarged issued share capital after the Proposed Bonus Issue	188,916,001 -	94,787 -	188,916,001 (i)(ii)6,500	94,787 7
  188,916,001 75,566,400	94,787 37,783	188,922,501 75,569,000	94,794 37,785
  264,482,401	132,570	264,491,501	132,579

  Notes:

  • (i) Assuming 6,500 Outstanding Options are exercised into new PPHB Shares prior to the Entitlement Date as follows:

    No. of Outstanding Options	Exercise Price (RM)	Amount (RM)
    6,500 0.785 5,103

  • (ii) Including the reversal from the ESOS and ESGS reserve account to the share capital account arising from the exercise of 6,500 Outstanding Options.

• 4.2 Net Assets ("NA"), NA per Share and gearing

  For illustrative purposes, the pro forma effects of the Proposed Bonus Issue on the NA, NA per Share and gearing of PPHB Group based on the latest audited consolidated statement of financial position of PPHB as at 31 December 2021 are as follows:

  Minimum Scenario

After the

(i)After the capitalisation of RM37,783,200 from the retained profits account pursuant to the Proposed Bonus Issue.

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