KUALA LUMPUR (Sept 21): Excel Force MSC Bhd (KL:EFORCE), one of the companies linked to businessman Wong Thean Soon, has proposed a private placement to raise up to RM10.98 million for working capital and free up funds for a software project.
The move comes about three weeks after Wong was forced to sell more than two-thirds of his stake in the financial technology solutions provider.
Excel Force plans to issue up to 60.99 million new shares, representing 10% of its existing issued share capital, to third-party investors to be identified later, according to its filing with Bursa Malaysia on Monday.
At an illustrative issue price of 18 sen per share, the exercise is expected to raise RM10.98 million, of which RM10.76 million will be allocated for working capital and RM220,000 for placement expenses.
Of the working capital allocation, RM8.61 million is earmarked for operating expenses, including staff costs, software licensing and subscription fees, cloud hosting, data centre charges, system maintenance and cybersecurity-related expenses.
The remaining RM2.15 million will be used for general and administrative expenses, including utilities, rental, professional fees and office upkeep.
Excel Force said its cash and bank balances, including fixed deposits and short-term funds, stood at approximately RM6.35 million, of which RM5.2 million had been earmarked for existing requirements.
The group also said it secured a new project from an unnamed client in May for the development and implementation of a system application, which is expected to continue until 2028.
"The ongoing execution of this project is expected to result in higher working capital requirement, including additional operating resources required to support its development, implementation and delivery," it said.
Excel Force said the proposed placement would fund its operations while preserving cash resources for their earmarked purposes.
The placement shares will be issued at a discount of not more than 10% to the five-day volume-weighted average market price preceding the price-fixing date. The illustrative issue price of 18 sen represents a discount of approximately 7.46% to the five-day volume-weighted average market price of 19.45 sen.
The exercise may be implemented in one or multiple tranches within six months of Bursa Securities' approval, with the issue price for each tranche to be determined separately.
Cash call follows substantial share disposals involving TS Wong
Zetrix AI Bhd (KL:ZETRIX) founder Wong, better known as TS Wong, has seen his shareholdings in several listed companies reduced following the forced selling of his pledged shares, alongside a series of boardroom changes.
Wong disposed of 104.21 million shares in Excel Force through two open-market transactions on Aug 28 and Sept 1, reducing his direct stake to 7.23%, or 44.12 million shares, from 24.32%, or 148.34 million shares.
He also held an indirect interest of 6.77% in the company following the disposals.
The shares sold were estimated to be worth RM10.66 million based on the closing prices on the respective transaction dates.
However, it was not established whether the disposals in Excel Force were also the result of forced selling.
Assuming the full placement of 60.99 million shares and he does not subscribe for any of them, Wong’s direct stake in Excel Force would be diluted further to approximately 6.58%, while his indirect interest would fall to approximately 6.16%.
His combined interest would consequently decline to approximately 12.74% from 14.01%.
The share disposals coincided with a series of boardroom changes at Excel Force, including the appointment of Goh Jooi Shen as managing director on Sept 8, replacing Wong Kak Chau, who was redesignated as an executive director.
Four other directors also resigned from the board, including executive director Eng Shao Han and independent directors Datuk Seri Ismail Ahmad, Datuk Mat Noor Nawi and Elisa Tan Mun-E.
The selling pressure initially centred on Zetrix AI, where Wong said at a briefing with analysts and investors that the sell-down was triggered by margin calls on pledged shares and exacerbated by short-selling activities.
The forced selling subsequently extended to Cuscapi Bhd (KL:CUSCAPI), where Wong more than halved his direct stake to 10.49% from 25.13% between Aug 28 and Sept 7.
Wong subsequently ceased to be a substantial shareholder of Cuscapi after disposing of another 103.6 million shares through direct business transactions on Sept 11, leaving him with approximately 2.5% of the company.
Besides Wong, Excel Force's current substantial shareholders include Wang Chung Kuen, with a 18.34% stake, followed by former prime minister Datuk Seri Najib Razak’s brother Datuk Mohamed Nizam Abdul Razak (7.18%), and Asia Internet Holdings Sdn Bhd (6.77%), according to Bloomberg.
Excel Force is principally involved in the development, provision and maintenance of computer software applications and system solutions for the financial services industry, particularly stockbroking companies and investment banks.
Its products include front-, middle- and back-office stockbroking systems, stockbanking solutions, market analytics and fundamental analysis tools, while its subsidiaries also provide online investor relations, corporate website and digital investment solutions.
In its latest fundraising proposal, the group said it is also exploring incorporating artificial intelligence into its software and strengthening its cybersecurity offerings.
Excel Force shares closed at 21 sen on Monday, down one sen or 4.55%, giving the group a market capitalisation of RM128.07 million.