KUALA LUMPUR (July 3): Mudajaya Group Bhd (KL:MUDAJYA) plans to raise up to RM25.96 million by issuing 265.74 million new shares (10% of its enlarged share capital) through a private placement. The money will help repay part of its bank borrowings, which totalled RM644.49 million as of June 24, 2025.

The repayment will focus on RM239.67 million in term loans and revolving credit. In a filing with Bursa Malaysia, the group said this move is expected to reduce interest costs by up to RM1.58 million per year.

As of March 31, 2025, Mudajaya had RM250.7 million in cash, including bank balances and structured deposits.

In a stock exchange filing, Mudajaya said the new shares will be offered to independent investors who will be chosen later. The final price isn't fixed yet, but based on an example price of 8.14 sen per share (about 10% below the recent average market price of 9.04 sen), the placement could raise up to RM25.96 million.

The exercise is expected to be completed in the fourth quarter of 2025.

Of the RM25.96 million in proceeds, RM25.90 million will be used to repay bank borrowings, while the remaining RM60,000 is allocated for estimated expenses related to the private placement.

Mudajaya said the private placement allows the group to raise funds without incurring interest costs, unlike conventional borrowings, which could impact the group’s bottom line.

The private placement will reduce the ownership of major shareholders. Kuo Jen-Hao and related companies will see their combined stake drop from 62.01% to 56.38% through Yakin Setiamas Sdn Bhd. While Cheng Lung Don and his related companies will see their stake fall from 11.76% to 10.69% through Minyi Holdings Ltd.

Shares of Mudajaya closed unchanged at nine sen on Friday, valuing the group at RM239.2 million. The counter has declined 25% year-to-date.