KUALA LUMPUR (Aug 2): YBS International Bhd (KL:YBS) said it plans to raise up to RM25.6 million through a private placement with over half of the proceeds allocated to fund the lithium-ion battery manufacturing project it is undertaking in partnership with US advanced silicon battery producer Enovix Corp.

The company said it intends to issue up to 10% of its enlarged share base, or 30.47 million shares, to third-party investors who will be identified later.  

The amount to be raised is based on an indicative price of 84 sen per share, which is a discount of 9.02% (or eight sen) from the stock's five-day volume-weighted average price of 92.33 sen as of July 31, said YBS in a filing with Bursa Malaysia on Friday.

YBS said it could raise RM22.1 million in the minimum scenario (which assumes none of the employees' share option scheme (ESOS) options is exercised before the placement) or RM25.6 million in the maximum scenario (where all ESOS options are fully exercised).

Of the proceeds under the maximum scenario, YBS said over 58% or RM15 million will be allocated to finance the Enovix project, RM8.3 million for working capital requirements, and the remaining amount will be used for capital expenditures in the precision machining and stamping segment, as well as to cover estimated placement expenses.

YBS operates in precision engineering, plastic injection moulding, precision machining, stamping, electronic manufacturing services, and paper products.

On July 27 last year, YBS announced a manufacturing agreement with Nasdaq-listed Enovix for its wholly owned subsidiary, Orifast Solutions Sdn Bhd, to be a non-exclusive supplier of lithium-ion batteries for Enovix in Asia, with a tenure of 10 years.

YBS has not conducted any fundraising exercises in the past 12 months. As of the end of March, the company had RM8.47 million in cash and bank balances, RM12.89 million in short-term borrowings, and RM42.9 million in long-term borrowings.

YBS expects the placement to be completed by the third quarter of 2024. It is projected to lower YBS's gearing ratio to 0.46 times and the net asset per share to 37 sen under the maximum scenario.

Shares in YBS closed 6.5 sen or 7.18% lower at 84 sen on Friday, giving the company a market capitalisation of RM220.64 million.