Highlight KNM aims to raise RM106.64m via placement

by **Cals** Thu 22 Oct 2015, 01:36

Highlight

[size=28]KNM aims to raise RM106.64m via placement

By Chester Tay / theedgemarkets.com | October 21, 2015 : 8:03 PM MYT

KUALA LUMPUR (Oct 21): KNM Group Bhd ([You must be registered and logged in to see this image.] Valuation: 1.70, Fundamental: 0.85) has proposed a private placement to raise up to RM106.64 million, which will be used to repay borrowings, for working capital and to defrayment expenses related to the exercise.

In a filing with Bursa Malaysia today, KNM said the placement entails the issuance of up to 193.89 million shares, representing approximately 10% of the issued share capital of the group.

It added the issue price of the placement shares will be determined and announced at a later date, after receiving the relevant approvals and after taking into consideration, the prevailing market conditions.

Still, the issue price should not be a discount of more than 10% to the five-day volume weighted average price (VWAP) of KNM’s share price immediately prior to the price fixing date, and its par value of the shares of 50 sen.

Assuming KNM managed to raise RM106.64 million, the group said it will utilise RM51 million (47.82%) for repayment of borrowings, RM52.66 million (49.38%) for working capital, and the remaining for expenses related to the proposed placement.

“The group requires additional working capital to fund the newly-secured projects and potential additional contracts to be secured in relation to the Pengerang Integrated Petroleum Complex Project in Johor,” it said.

As at June 30, 2015 (2QFY15), KNM’s total borrowings stood at RM676.38 million, of which RM392.4 million were short term loans and borrowings, with a gearing ratio of 0.29 times.

Subsequent to the shares placement, the group expects to lower the gearing ratio to 0.26 times.

KNM expects the corporate exercise to be completed by the first quarter of 2016.

KNM shares fell half sen or 0.93% to close at 53.5 sen today, with 22.29 million shares traded, giving it a market capitalisation of RM1.05 billion.

(Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)
[/size]