KUALA LUMPUR: Yong Tai Bhd is undertaking multiple corporate exercises in order to strengthen its equity base and balance sheet to tap on the post-Covid-19 recovery. 

In a filing to Bursa Malaysia today, the property developer said the corporate exercises consisted of share consolidation, bonus issue of warrants and debt settlements.

Yong Tai has proposed a share consolidation of every five shares into one share and a bonus issue of up to 103.09 million free warrants on the basis of one warrant for every four consolidated shares. 

Following the consolidation of its shares, the company also proposed to enter into a debt settlement of its RM46 million debt owing to 19 creditors.

This is via the issuance of 92 million new shares at 50 sen each, a move that will strengthen its capital structure and balance sheet. 

Yong Tai chief executive officer and executive director Datuk Boo Kuang Loon said the exercises would help to provide some stability in the company's share prices following a difficult period during the Covid-19 pandemic. 

"The proposed share consolidation is vital to reduce the volatility in the company's share price. 

"It also helps to increase the reference price and enhance the company's profile among investors. 

"This will be vital for the group as we move towards the post-Covid-19 recovery phase," he said in a separate statement.

Yong Tai said it had borne the brunt of Covid-19 pandemic and the lockdown imposed globally to contain the spread of infection due to its exposure to property development and the tourism industry. 

This led to sharp losses and a decline in share prices over the last two years. 

However, with the reopening of the economy, Yong Tai said it wanted to regain its mojo by focusing on reopening its Encore Melaka theatre and completing its ongoing property development project. 

Besides that, the gold mining which has started exploration and the production will commence in phases, is expected to contribute to the company's earnings going forward.

Meanwhile, on the debt capitalisation proposal, Boo said the debt settlement of RM46 million via issuance of new Yong Tai shares, will help to strengthen the company's balance sheet and cashflow going forward. 

"It is important given the rising interest environment as well as the ability for the management to focus on the recovery phase.

"The creditors are also not taking any discount from the issuance of new shares, but it is based on the prevailing market price. 

"This highlights the confidence that our suppliers, business associates and contractors have in the recovery going forward.

"With the structural disadvantages due to the pandemic being gradually removed, we are confident that we will be able to recover over the next six to 12 months quickly," he said.