KUALA LUMPUR (June 4): Building materials supplier Ipmuda Bhd — controlled by its executive chairman Tan Sri Abu Sahid Mohamed with a 31.23% stake — has proposed private share placement which may raise some RM8.91 million, based on its illustrative offer price of RM1.23 per share.

In a filing with Bursa Malaysia this evening, Ipmuda said some 98.8% or RM8.8 million will be used to fund its working capital requirements that include purchase of trading stock, raw materials as well as payment to suppliers and other expenses.

According to Ipmuda (fundamental: 0.6l valuation: 2), the placement shares may be issued at a discount of not more than 10% of its five-day weighted average market price, but not lower than its par value of RM1 each.

Ipmuda expects to issue up to 7.25 million shares, equivalent to 10% of its issued and paid-up capital, which will enlarge to 79.716 million shares.

The share placement is expected to be completed by the third quarter of this year (3Q15).

Post-completion, the private placement exercise will dilute Abu Sahid’s stake to 28.38% from 31.23% currently.

Last year, Ipmuda saw the departure of its managing director Datuk Seri Richard Lim Heng Suan who had served the group since 2005. David Chua Soon Li assumed the post of chief executive officer effective from Jan 1.

Besides supplying building materials, Ipmuda also has a maiden property development project in Kota Kinabalu, Sabah.

In financial year ended Dec 31, 2014 (FY14), Ipmuda’s net profit trebled to RM13.87 million or 19.15 sen per share from RM4.49 million or 6.2 sen per share in FY13, despite a flat revenue at RM635.53 million from RM628.07 million a year ago.

The stock has gained 77.5% from 80 sen on Jan 12 to close at RM1.42 today, giving it a market capitalisation of RM102.9 million.

(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)