Sarawak Consolidated Industries Berhad (“SCIB” or the “Company”), a leader in civil engineering, is planning a private placement to raise up to RM10.98 million in gross proceeds for working capital, paying off borrowings, and anticipated private placement expenses.
While the issue price and the exact number of shares to be issued will be decided later, the proposed private placement will involve the issuance of up to 82.72 million placement shares at an indicative price of RM0.1327 per placement share to raise gross proceeds of up to approximately RM10.98 million under the most optimistic scenario, in which all of the Company’s 245.18 million outstanding warrants are exercised. If none of the outstanding warrants are exercised, the minimal scenario would result in gross proceeds of RM7.72 million.
The indicative price per share represents a discount of roughly 9.97% to the five-day volume weighted average market price of SCIB shares up to the LPD of RM0.1474, while the proposed issuance represents no more than 10% of the issued shares as of the latest practicable date (“LPD”) of 30 December 2022. After receiving clearance from Bursa Securities Malaysia Berhad, the planned private placement may be carried out over a period of up to six months, or for any additional time permitted by it up until the conclusion of the next AGM.
The 46th Annual General Meeting, which was held on 8 December 2022, was the moment for the Company’s shareholders to accept the planned private placement.
“The proposed private placement is a more expeditious way to raise funds as opposed to a rights issue and is also 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.”
— Encik Rosland bin Othman, Group Managing Director of SCIB