Kingboard Chemical Holdings has unveiled a warrant issue that could raise up to $1.09 billion after announcing a sharp increase in interim net profit. The world's No3 maker of laminate - a material used in the production of printed circuit boards found in most electronic products - proposed a bonus issue of one warrant for every 10 shares. The warrant allows shareholders to subscribe to new shares at $20 per share until the end of 2006. The company's shares closed yesterday at $13.75. Executive director Chadwick Mok Cham-hung said the issue was one way to help Kingboard reduce its debt ratio, which stood at 60.8 per cent of its equity at the end of June, ahead of fresh investment plans in the next two years. The ratio rose from 45.7 per cent at the end of last year and 36 per cent at the end of June last year as the company aggressively expanded capacity in both its core laminate operations as well as upstream chemicals and downstream printed circuit board businesses. 'Hopefully, if our share price exceeds $20 in 2006, we can cut our debt by the proceeds from the warrant's exercising,' Mr Mok said. Kingboard spent $1 billion in capital expenditure in the first half of this year and plans to spend $500 million in the second half. First-half net profit surged 192.3 per cent to $545.5 million as turnover rose 65.04 per cent to $3.05 billion. The gross profit margin of the company's laminate business, which contributed 81 per cent of its first-half operating profits, jumped to 25.9 per cent in the period from 14.2 per cent last year, thanks to a 30 per cent rise in sales volume and prices. Laminate prices soared due to stronger sales of electronic products and a lack of key raw materials. Chairman Paul Cheung Kwok-wing said he expected laminate prices to remain relatively stable in the second half, adding that most new glass yarn production capacity would not hit the market until the second half of next year. An interim dividend of 10 cents was proposed, up from five cents last year.