KUALA LUMPUR (Oct 12): Just over a year after completing a private placement, Edelteq Holdings Bhd (KL:EDELTEQ) plans to undertake another private placement seeking to raise up to RM26.75 million.

The company said it is to repay bank borrowings and fund working capital for its automated test equipment (ATE) segment.

Its last private placement was completed on Oct 10 last year and raised gross proceeds of RM21.12 million based on 39.66 sen per share. The proceeds then were to repay bank borrowings and to fund working capital for its integrated circuit assembly and test consumable (C&T) segment.

The latest proposed placement involves the issuance of up to 90.08 million shares under the maximum scenario — 10% of the group’s issued shares — assuming all outstanding warrants and employee share option scheme (ESOS) options are exercised before the placement, said the engineering services provider in a bourse filing on Monday.

Based on an illustrative price of 29.7 sen per placement share, the placement is expected to raise up to RM26.75 million from third-party investors to be identified later. The illustrative price of 29.7 sen represents a discount of about 9.75% to the five-day volume-weighted average market price of 32.91 sen up to Sept 30, the latest practicable date of the announcement.

Edelteq intends to use RM20.4 million of the proceeds to repay bank borrowings, while RM6.26 million will be allocated for working capital for the ATE segment. The remaining RM100,000 is earmarked for placement expenses.

The group said it had total borrowings of RM23.3 million as at Sept 30, with the bulk, or RM20.4 million, comprising revolving credit facilities. These facilities were mainly incurred to finance the purchase of input materials for its C&T segment.

Edelteq expects repayment of the revolving credit facilities to generate annual interest savings of up to RM955,000.

With that, the company expects its gearing ratio to reduce to 0.34 times — post-completion of the private placement and assuming all warrants and ESOS options are exercised — compared to 1.13 times as at end-Dec 2025.

Meanwhile, the working capital allocation will be used to pay suppliers and creditors for input materials for the ATE segment, including wafer-handling robots, wafer load ports and precision motion stage systems.

The placement is subject to Bursa Malaysia Securities’ approval for the listing and quotation of the new shares, as well as any other relevant approval if required.

The private placement is expected to be completed by the first quarter of 2027.

Edelteq’s share price has jumped nearly 30% in less than two weeks, from 34 sen on Sept 30. The stock closed three sen, or 6.45%, lower at 43.5 sen on Monday, with a market capitalisation of RM255 million.