KUALA LUMPUR (July 15): Lambo Group Bhd has proposed a private placement to raise up to RM14.8 million for its e-commerce business expansion.

Up to 813.3 million shares, or 30% of the group's issued share capital, will be issued to independent third-party investors to be identified later, the group said in a stock exchange filing.

The issue price of the placement shares will be fixed at a later date, Lambo said, adding however that based on an indicative issue price of 1.82 sen per placement share, the exercise could raise up to RM14.8 million.

The group said its e-commerce business expansion will be funded not only from the proceeds raised from the private placement, but also from internal funds, external borrowings and other fundraising exercises.

Meanwhile, the group said it has budgeted RM35 million for an expansion plan for both LamboPlace and LamboMove in Malaysia.

Of this, RM20 million will be allocated for marketing campaigns to promote the two businesses, in a bid to create brand awareness and reinforce brand positioning.

According to the group's 2018 annual report, LamboPlace was launched in August 2018 and is an online platform which sells various merchandise, including fashion apparel, body care and home appliances. LamboMove, meanwhile, is the group's own last-mile delivery service, created to support the e-commerce business.

Besides RM20 million for marketing campaigns, the company said it will allocate RM5 million for system enhancement, RM4.5 million for expansion of warehousing and delivery capability and capacity, RM4.5 million for hiring personnel and RM1 million for office expansion.

Lambo, formerly known as Accsoft Technology Bhd, slipped into the red for the quarter ended March 31, 2020 with a net loss of RM467,000, compared with a net profit of RM3.82 million a year ago.

Revenue saw a massive decline of 96.83% to RM813,000, from RM25.64 million a year earlier. Lambo said the revenue fall was due to the decrease in the wholesale business-to-business segment as a result of the Covid-19 pandemic and the international trade war between the US and China.

Lambo's share price closed unchanged at two sen, valuing the group at RM54.22 million. Some 10.73 million shares were traded.