PETALING JAYA: Gadang Holdings Bhd proposes a private placement exercise to raise up to RM62.12 million for its ongoing and future construction project.
The group told Bursa Malaysia that the private placement will entail the issuance of up to 82.83 million new shares, representing 10% of its existing issued shares.
It intends to place out the placement shares to independent third party investors to be identified later.
Based on an indicative issue price of 75 sen per share, the private placement is expected to raise up to RM62.12 million, which will be utilised for construction projects expenditure, repayment of bank borrowings and expenses relating to the proposed private placement.
“The board had considered various methods of fundraising and is of the opinion that the proposed private placement is the most appropriate avenue of fund raising for the group to raise additional funds expeditiously without incurring financing costs associated with bank borrowings,” it said.
Among the construction projects identified by Gadang are its contract awarded by MMC Gamuda KVMRT Sdn Bhd (RM952.1 million), Cyberview Sdn Bhd (RM475 million) and TRX City Sdn Bhd (RM327.9 million).
The group’s outstanding bank borrowings amounted to RM334.8 million as at Feb 28 and it intends to utilise RM13.5 million of the proceeds to repay its bank borrowings.
“The annual interest savings to Gadang Group is approximately RM710,000 based on the interest rate of 5.25% per annum.”
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