KUALA LUMPUR (Feb 24): United Plantations Bhd (UP) has proposed to undertake a bonus issue of 208.13 million new shares on the basis of one bonus unit for one existing share held, to reward shareholders of the company.

In statements to Bursa Malaysia today, UP said all treasury shares in the company will be entitled to the bonus shares and such bonus shares will be treated as treasury shares to be held by the company.

"The board intends to undertake the proposed bonus issue to reward the existing shareholders of the company in the form of bonus shares for their loyalty and continuing support as the proposed bonus issue serves to increase the number of UP shares held by the company’s shareholders with no cash outlay by the shareholders, while maintaining their percentage of equity shareholding held in the company.

"In addition, the proposed bonus issue may: (i) potentially result in an improved trading liquidity of UP shares traded in the market at an affordable share price without affecting the size of the market capitalisation of the company; and (ii) encourage greater participation by investors as well as potentially broadening the shareholder base of the company," it said.

UP said that barring any unforeseen circumstances and subject to all required approvals being obtained, the bonus issue is expected to be completed in the second quarter of 2020.

AmInvestment Bank has been appointed as the principal adviser for the proposed bonus issue, UP said.

UP's share trade has been halted between 9am and 10am today in conjunction with several announcements including its results for financial year ended Dec 31, 2019. At 10:30am today, UP's share price fell 10 sen or 0.38% to RM26.30.