KUALA LUMPUR (December 6): Bintai Kinden Corp Bhd announced on Monday that it has offered to make a private placement of up to 20% of its existing issued shares in order to raise RM 35 million mainly to repay loans.
In a stock exchange filing, the group said the proposed private placement would involve the issuance of up to 111 million Bintai Kinden shares, which will be awarded to independent third-party investors who will be subsequently identified at an issue price. which will be determined later.
“The investment shares will be issued on the basis of a discount not exceeding 10% compared to the five-day volume-weighted average price (VWAP) of the shares up to and including the last trading day immediately preceding the date of price fixing, to be determined by the council after taking into account the prevailing market conditions.
“For illustrative purposes only, on the basis of an indicative issue price of 31.53 sen per investment share, the issue price of the investment shares would represent a discount of 9.99% compared to the Five-day VWAP of shares up to and including the LPD [last practicable date] of 35.03 sen, ”the group said.
Since the proceeds will be mainly used for the repayment of bank loans, Bintai Kinden said this will help alleviate its cash flow by reducing its principal and interest service obligations as well as its debt level.
The group added that this would allow it to quickly raise additional funds without having to incur interest charges or repay the principal of bank loans, thus allowing Bintai Kinden to preserve its cash flow.
“On the other hand, other fundraising such as a rights issue may not be suitable as they will involve a cash call from existing shareholders,” the group added.
Following the proposed private placement, the enlarged capital base is also expected to further strengthen the financial position of the company, he noted.
According to Bintai Kinden, the exercise should be completed by the end of this year.
Bintai Kinden shares ended down 1.5 sen or 4.41% at 32.5 sen, with a market cap of RM 180.37 million. The stock is down 128% from its peak of 74 sen on September 28.