KUALA LUMPUR (Nov 5): Sin Heng Chan (Malaya) Bhd (SHC) has proposed a private placement to raise up to RM29.87 million, of which a major portion will go towards the expansion of its oil palm plantation segment.

In a bourse filing, the group said the placement will involve the issuance of up to 20% of its total issued shares to third party investors to be identified.

Based on an indicative issue price of 48.32 sen per placement share and total placement shares of between 37.82 million and 61.82 million, SHC estimates it could raise between RM18.28 million and RM29.87 million from the corporate exercise.

The group plans to use RM15.71 million for business expansion under the minimum scenario, or as much as RM27.3 million if the group issues the maximum 61.82 million placement shares.

The balance of the proceeds will go towards working capital and to cover the private placement's estimated expenses.

The group said it has a contiguous plantation landbank of about 10,940ha in Sarawak, of which 4,063ha are planted with oil palms, and that the funds raised via the exercise will be used to expand the plantation into the remaining unplanted area by a minimum of 1,500ha in the next three years.

“In addition, the group plans to accelerate its replanting programme in existing low-yielding areas that have tall and aging palms.

“The group also intends to further invest in machinery and equipment and to further improve the infrastructure and facilities in the plantations to facilitate the mechanisation of key activities,” it said.

The group expects to complete the private placement by the first quarter of 2022.

SHC shares slipped 0.5 sen or 1% to close at 50.5 sen, giving the group a market capitalisation of RM128.8 million.