KUALA LUMPUR: Sarawak Consolidated Industries Bhd (SCIB) is undertaking a private placement to raise RM10.98 million to finance working capital and repayment of bank borrowings.
Group managing director Rosland Othman said the private placement is a more expeditious way to raise funds than a rights issue and is more cost-effective than bank borrowings, given the higher interest rates.
"By repaying current bank borrowings, we can reduce gearing and increase the net assets while strengthening the financial and capital position of the company as well as potentially improving the liquidity of our shares in the market," he said in a statement today.
SCIB said that while the issue price and the actual number of shares to be issued will be determined later, under the maximum scenario in which all the company's 245.18 million outstanding warrants are exercised, the private placement will entail the issuance of up to 82.72 million placement shares at an indicative price of 13.27 sen per placement share to raise gross proceeds of up to approximately RM10.98 million.
Under the minimum scenario, should no outstanding warrants be exercised, gross proceeds raised will be RM7.72 million.
The issuance represents not more than 10 per cent of the issued shares as of the latest practicable date of December 30, 2022, while the indicative price per share represents a discount of 9.97 per cent to the five-day volume weighted average market price of SCIB shares up to the LPD of 14.74 sen.
"The private placement may be implemented in several tranches within six months of approval from Bursa Malaysia or any extended period approved by it until the conclusion of the next annual general meeting (AGM).
"The private placement is undertaken following the approval obtained from the shareholders of the company at the 46th AGM convened on Dec 8, 2022," it added.