KUALA LUMPUR (July 3): Unisem (M) Bhd (KL:UNISEM) plans to raise up to RM742.02 million through a private placement to fund the expansion of its semiconductor-related business and reduce bank borrowings.

The proposed fundraising comes after Unisem's shares surged 54% so far this year, reaching a record high of RM5.30 on May 29. The stock has since eased from that peak, closing 10 sen or 2.07% lower at RM4.73 on Thursday, valuing the group at RM7.63 billion.  

The private placement will involve the issuance of up to 161.31 million new shares, representing up to 10% of the company's existing issued share capital with the issue price to be announced at a later date, said the outsourced semiconductor assembly and test (OSAT) service provider in a bourse filing.

The placement shares will be offered to local and foreign investors through a book-building exercise. Unisem said no placement shares will be allocated to its directors, major shareholders, chief executive or persons connected to them.

Based on an illustrative issue price of RM4.60 per share, the exercise is expected to raise gross proceeds of about RM742.02 million.

The indicative price represents a discount of about 2% to Unisem's five-day volume-weighted average market price of RM4.6953 up to July 1.

Of the proceeds, about RM444.54 million will be used to purchase semiconductor assembly, test and wafer bumping equipment and establish additional cleanroom facilities.

Another RM269.93 million will be used to repay bank borrowings, and a further RM22.95 million for working capital.

Unisem said the cash call follows the completion of its new production facility in Gopeng, Perak, which has significantly expanded its manufacturing capacity.

The group’s bank borrowings have more than doubled to RM406.4 million in FY2025, from RM187.1 million, primarily to fund capital expenditures for the group’s plant expansion initiatives.

On the other hand, the group had cash and bank balances of RM258.9 million as at March 31, 2026.

Post-private placement, the group expects to bring down its gearing to 0.14 times, from 0.19 times.

The proposed placement is also expected to improve Unisem's public shareholding spread to about 31.84% from 25.02%, the group said.

CIMB has been appointed as the principal adviser and the sole placement agent for the proposed private placement.