KUALA LUMPUR (Aug 12): Green Packet Bhd plans to raise between RM62.51 million and RM98.94 million through a private placement to fund its cloud business.

In a statement today, Green Packet said under the minimum scenario it would be issuing 120.21 million new shares, representing just under 11% of its current share capital.

This is after taking into account the 100.13 million shares issued under the earlier placement in July, representing 9.09% of its current share capital of 1.1 billion shares.

The maximum scenario, meanwhile, takes into account the July placement and also assumes that Green Packet’s 350.32 million outstanding warrants expiring 2023 are fully converted. Under this scenario, Green Packet’s latest placement will total 190.27 million shares.

Green Packet said the indicative issue price for the shares is 52 sen apiece, representing a discount of 9.12% to its five-day volume weighted average price of 57 sen.

“At this price, the proposed private placement is expected to raise gross proceeds of RM62.51 million under the minimum scenario and up to RM98.94 million under the maximum scenario.

Green Packet said it will use RM2.54 million as working capital for the cloud business.

A balance of anywhere between RM59.78 million and RM96.21 million will be used to acquire IT infrastructure like servers and network equipment in the next two years.

The indicative issue price is on par with the issue price by Green Packet in its July placement, which raised RM52.07 million for its digital services segment.

“The cloud computing business segment is expected to be introduced in 2021,” said Green Packet, which expects a payback period and to generate sufficient cash flows for operations after the first five years.

As at March 31 — prior to the July placement — Green Packet had cash of RM50.8 million.

Shares of Green Packet, which also owns e-wallet unit kiplePay, slipped half a sen or 0.85% to close at 58 sen, today, valuing the group at RM638.01 million.