SCIB proposes ESOS of up to 15pct of issued shares to key personnel

Sarawak Consolidated Industries Bhd (SCIB) has unveiled a proposed employee share option scheme (ESOS) that could consume up to 15% of its total issued shares, intended for key executives. This incentive scheme, disclosed in tandem with SCIB's proposed property diversification, could result in issuing up to 114.54 million new ordinary shares to eligible directors and employees over a span of five years.

At a board meeting today, SCIB's board sought shareholder approval for the ESOS at an upcoming extraordinary general meeting (EGM), with the aim of granting up to 80% of the shares directly to top executives. CEO Michael Tan Thian Zhi and COO Huang Vui Bing, who are new to the role, currently hold no shares in SCIB. The exercise price for the ESOS options will be determined by a discount not exceeding 10% of the 5-day volume-weighted average market price of SCIB shares prior to the offer date.

If the shares are fully exercised at an illustrative price of 11.1 sen each, the scheme is expected to generate RM12.71 million in additional cash. Management plans to utilize these funds to bolster working capital for day-to-day operations, administrative expenses, and staff salaries amidst the company's expanding property ventures.

Concurrently, SCIB is requesting shareholder approval for a property development diversification, which is projected to generate 25% or more of the company's future net profits. This move follows the sale of SCIB's core manufacturing unit to YTL Cement (Sarawak) Sdn Bhd for RM113 million on May 22. SCIB is now pivoting towards construction, engineering, and real estate to diversify its revenue streams.

The company plans to allocate part of the SCM disposal proceeds to fund its property investments, targeting growth centers in Bintulu, Sarawak, Penampang, and Kota Kinabalu in Sabah.