KUALA LUMPUR (Feb 25): NEXG Bhd (KL:DSONIC), formerly known as Datasonic Group Bhd, plans to raise up to RM133.74 million via a private placement, mainly to fund its business expansion and repay bank borrowings.

The placement will involve the issuance of up to 448.79 million new shares, representing up to 10% of the company's issued shares, to independent third-party Bumiputera investors, NEXG said in an exchange filing on Tuesday.

This is because some of its tender projects require a higher percentage of Bumiputera shareholding, it explained.

NEXG said that based on an illustrative price of 29.8 sen per share, the private placement could raise up to RM133.74 million.

Of the proceeds raised under the maximum scenario, RM75.94 million will be allocated to finance existing and future projects, the company said.

Another RM25 million will be used to pare down bank borrowings, potentially saving RM1.4 million in interest payments annually. This would result in total borrowings reducing to RM34.82 million with the gearing ratio potentially declining to 0.04 times.

As at March 31, 2024, NEXG's total borrowings stood at RM59.82 million with a gearing ratio of 0.16 times.

The company said another RM20 million of the private placement proceeds will be used for the acquisition of a new factory and purchase of machinery and equipment.

The private placement, which may be conducted in multiple tranches, is expected to be completed by the third quarter of this year.

Kenanga IB has been appointed as the adviser and the placement agent for the exercise.

Last week, NEXG reported a net profit of RM26.94 million for its third quarter ended Dec 31, 2024, up 63.55% from the RM16.47 million a year earlier amid higher demand for its products and services. Quarterly revenue — the bulk of which was derived from the supply of smart cards, passports and personalisation services — grew 21.6% year-on-year to RM97.9 million from RM80.5 million.

Nine-months next profit grew 33.7% to RM71.74 million from RM53.66 million a year earlier, as cumulative revenue expanded 6.8% to RM269.68 million from RM252.57 million.

NEXG's share price closed down one sen or 3.3% at 29.5 sen, bringing the company a market capitalisation of RM876 million.