PETALING JAYA: Iris Corp Bhd has proposed a private placement of up to 10% of its issued shares for an illustrative price of 12.38 sen each to raise gross proceeds of RM36.7 million.
The proposed private placement involves the issuance of up to 296.63 million new shares to be placed out to third party investor(s) to be identified at a later date.
The company intends to use up to RM36.6 million of the proceeds for working capital requirements, which include, among others, staff salaries and allowances, wages, general office expenses, statutory payments, payment of creditors and other operating expenses.
The board is of the view that the proposed private placement will enable the company to raise additional funds without incurring interest expenses as compared to bank borrowings.
“It will provide the company an expeditious and cost effective way of raising funds from the capital market as opposed to other forms of fundraising exercises involving prorata issuance, which would typically entail a longer implementation time and generally requires a higher discount to the prevailing market price. This would mitigate any risks associated with market movements and investor’s sentiment,“ Iris said.
It will also enable the company to further strengthen the group’s financial position and capital base, as well as reducing its gearing ratio.
However, the earnings per share of the group may be diluted as a result of the increase in the number of shares upon the completion of the exercise. Notwithstanding this, the proceeds from the exercise may contribute positively to the earnings of the group for the ensuing financial years, when the benefits of the utilisation of proceeds are realised.
The proposed private placement is expected to be completed by the fourth quarter of 2020.
source https://www.thesundaily.my/business/iris-proposes-private-placement-to-raise-rm367m-CM2619602
No comments:
Post a Comment