KUALA LUMPUR (May 8): Malaysian Genomics Resource Centre Bhd (KL:MGRC) has proposed a private placement exercise to raise up to RM2.52 million, alongside a reduction of its issued share capital by RM42 million, as part of its efforts to improve its financial position and fund working capital.

Concurrently, MGRC is proposing a capital reduction of RM42 million, intended to eliminate the company’s accumulated losses, thereby enhancing its ability to declare future dividends and improve its financial flexibility.

As at end-December 2024, MGRC reported accumulated losses of RM27.81 million at the company level and RM41.28 million at the group level. Post-capital reduction and after deducting related expenses, the company expects to report retained earnings of RM13.93 million and group-level retained earnings of RM455,000.

The proposals are subject to shareholder approval at an upcoming extraordinary general meeting and, in the case of the capital reduction, confirmation by the High Court. The private placement is expected to be completed by the second quarter of 2025, and the capital reduction by the third quarter.

In a bourse filing on Thursday, the loss-making genomics and biopharmaceutical firm said the proposed private placement will involve the issuance of up to 13.72 million new shares — representing not more than 10% of its total issued shares — to third-party investors to be identified later.

The indicative issue price is set at 18.37 sen per share, representing a 10% discount to the five-day volume-weighted average market price of 20.41 sen up to April 25, 2025. The actual issue price will be determined at a later date, depending on market conditions.

MGRC plans to use RM2.26 million of the proceeds for working capital, including business expansion, procurement of lab consumables, marketing and advertising, and repair and maintenance for its office and laboratory, while the remaining RM265,000 will cover placement-related expenses.

M&A Securities has been appointed as the principal adviser and placement agent for the exercise.

At the noon break on Thursday, shares of MGRC were up 4.5 sen or 19.15% at 28 sen, giving the group a market capitalisation of RM38.42 million.