24/03/2012 (The Star) - Jaya Tiasa Holdings Bhd shares surged to a high of RM8.44 the highest in 12 years but finished short of the intraday high after it announced a bonus issue, share placement and one-for-20 share dividend.

The timber producer and oil palm planter was up 61 sen to RM8.30. Volume, however, was relatively thin with over 380,000 shares traded.

Analysts said the stock had attracted fresh interest after it announced the corporate exercise.

They said this would allow the company to increase future dividend payout.

On Thursday, Jaya Tiasa announced a share placement that would involve the issuance of up to 42.04 million new shares at RM7.13 each. After adjusting for the payment of the share dividend, Jaya Tiasa said the proposed placement was expected to raise gross proceeds of RM299.8mil.

Jaya Tiasa's proposed bonus issue will be on the basis of two shares for every one share held while its one-for-20 share dividend will go ex on April 6.

RHB Research said that based on Thursday's closing price of RM7.69, the private placement could raise gross proceeds of RM325.9mil, which would reduce its net gearing to 0.31 from 0.62 times as at Jan 31.

“Potential dilution will be minimal at 6% for financial year ending April 30, 2013 earnings per share forecast after accounting for interest savings.

“We are positive on these corporate exercises as these will address the ongoing concerns of low trading liquidity of the stock. Apart from reducing gearing, this fund raising exercise could be a prelude to potential land-bank acquisition by the company to increase the land-bank of its oil palm plantation,” RHB Research said.

Jaya Tiasa reported a 14.1% jump in net profit to RM45.5mil for the third quarter ended Jan 31, 2012 from RM39.8mil a year earlier. Revenue for the quarter stood at RM237.5mil.

For the first nine months, Jaya Tiasa's net profit surged more than 50% to RM142.5mil on revenue of RM737mil.