KUALA LUMPUR (July 26): Biopharmaceutical company Malaysian Genomics Resource Centre Bhd (KL:MGRC) has proposed to undertake a private placement that is expected to raise up to RM4.98 million.

The proposed placement involves up to 10% of its issued share, or 13.72 million new shares, to investors to be identified later, MGRC said in the bourse filing. The company has already secured a mandate from shareholders during an annual general meeting on April 29, it noted.  

For illustrative purposes, based on the five-day volume-weighted average market price of MGRC shares up to July 12 of 40.3 sen per share, the issue price of placement shares shall be at an issue price of 36.3 sen per placement share.  

“The proposed private placement will enable MGRC to raise funds without incurring additional interest expense, thereby minimising any potential cash outflow in respect of interest servicing costs and preserving the group’s cash flow,” MGRC said.  

MGRC has earmarked RM2.6 million proceeds from the private placement to conduct a pre-clinical study to assess the safety and effectiveness of ArteCells treatment, which is designed for various treatments.

The company will also set aside RM2.19 million for working capital requirements of its day-to-day operations, which include staff costs, purchase of inventory and consumables, professional fees, among others. The remaining RM200,000 is to defray placement expenses.  

The proposed placement is expected to be completed by the fourth quarter of 2024. M&A Securities has been appointed as the principal adviser and placement agent for the exercise.

Shares in MGRC fell half a sen or 1.25% at 39.5 on Friday, valuing the company at RM54.2 million. Year to date, the stock has depreciated over 12%.