KUALA LUMPUR (Jan 16): Infrastructure utilities construction services provider MN Holdings Bhd is looking to raise between RM20.66 million and RM37.16 million through a private placement of 73.58 million shares or 10% of its enlarged issued share capital at an issue price to be fixed at a later date.

In a filing with Bursa Malaysia on Tuesday, ACE Market-listed MN Holdings said the gross proceeds to be raised from the proposed corporate exercise will be used for working capital requirements.

Assuming the placement shares are issued at an indicative issue price of 50.5 sen each, which is a 9.66% discount to the five-day volume weighted average market price of MN Holdings shares of 55.9 sen per share as at Jan 12, 2024, the group would raise RM20.66 million under the minimum scenario via the issuance of 40.9 million shares, or 10% of its existing issued share capital. It would raise RM37.16 million under the maximum scenario where 73.58 million shares, or 10% of its enlarged issued share capital, will be placed out.

MN Holdings also said the proposed private placement will enable the group to raise funds more expeditiously and in a more cost-effective manner as opposed to other fund-raising options.

"The proposed private placement is expected to strengthen the shareholders and capital base of the group, as well as serve as an additional source of funding for the group without incurring interest expenses as compared to borrowings," it added.

It added that it is actively exploring potential underground utilities engineering and substation engineering projects in Malaysia.

"While specific details and contract values remain undetermined at this stage, this venture, coupled with prudent allocation of the proceeds, will decrease the group's reliance on external financing. This strategic move positions the group to concurrently undertake multiple construction projects, thereby enhancing operational flexibility and sustaining long-term growth. The utilisation of the proceeds is expected to contribute to the future income of the group," it said.

M&A Securities Sdn Bhd has been appointed as the adviser and placement agent for the proposed private placement, which is expected to be completed by the first half of 2024.

MN Holdings shares closed unchanged at 61.5 sen on Tuesday, giving it a market capitalisation of RM253.8 million. The stock has risen 223.68% over the past one year.