KUALA LUMPUR: VS Industry Bhd
's shareholders have greenlit a bonus issue of up to 395.7 million new warrants on the basis of one warrant for 10 existing shares.
At the extraordinary general meeting (EGM) held on Monday, the voters passed the proposed bonus issue of the warrants, which is expected to be completed by the third quarter of 2024.
The warrants shall have a tenure of two years.
According to managing director Datuk SY Gan, the bonus issue is a reward to shareholders, while giving them an opportunity to increase their equity participation in the group by exercising them at a pre-determined price over the tenure of the warrant.
He added that the group is embarking on a new growth chapter with a progressive uptrend in orders from its customers expected to continue.
"Additionally, our value chain enhancement initiatives are gaining healthy traction, which strengthens our capabilities as a vertically integrated EMS provider and enhances our profit margins," he said at the conclusion of the EGM.
Gan also sounded upbeat on the group's venture into the Philippines.
Last week, VS Industry Philippines, Inc (VSIP) secured new orders from a key customer to manufacture selected consumer electronics products on a box-build assembly basis, which entails the provision of end-to-end processes from production to assembly, testing, packaging, labelling and logistics arrangement.
The expected revenue contribution from the customer based on the recurring nature of the orders is RM300mil for the financial year ending July 31, 2025 (FY25), and RM1.2bil for the financial year ending July 31, 2026 (FY26).
This is derived from anticipated sales volume and pricing, bringing the aggregate expected revenue over the next two financial years to RM1.5bil.
"VS is confident on this front, which is supported by our asset-light strategy. We target to commence mass production by the first quarter of 2025.
"Overall, it is exciting times ahead for VS and we are upbeat on the prospects," said Gan.
