N2N plans private placement to raise RM108m

PETALING JAYA: N2N Connect Bhd intends to raise RM108.6 million via a private placement exercise.
The proposed private placement entails the issuance of 122.03 million new N2N shares or 28% of the share capital of N2N, at an issue price of 89 sen per placement share.
N2N also proposes to create an additional 500 million new shares to increase its share capital from RM50 million comprising of 500 million shares to RM100 million comprising 1 billion shares. It also proposed amendments to the memorandum and articles of association of N2N.
N2N is currently in discussions with Nikkei Inc and QUICK Corp on a proposed business alliance which involves incorporating Nikkei and QUICK's financial news and information and business analytics with N2N's integrated financial trading platform TcPro.
"Assuming the placement shares are fully allocated to the placees, Nikkei and QUICK will emerge as new substantial shareholders of the company with a 14% and 11.17% stake each," N2N said in a circular to shareholders on Friday.
At this juncture, the proposed business alliance has yet to be finalised or agreed upon and is only expected to materialise within six months after the completion of the proposed private placement.
"The proposals are not conditional upon the proposed business alliance. However, the proposed business alliance is conditional upon the proposed private placement."
The proceeds to be raised from the proposed private placement are intended to be utilised for business expansion (RM72 million), repayment of bank borrowings (RM15.59 million), general working capital (RM20.17 million) and expenses related to the proposals (RM746,000).
"The proposed private placement is not expected to have any material effect on the earnings of the N2N Group for the financial year ending Dec 31, 2014. The earnings per share (EPS) of the N2N Group may, however, be reduced correspondingly as a result of the increase in the number of N2N shares in issue pursuant to the proposed private placement," N2N said.
Nevertheless, proceeds to be raised from the proposed private placement are expected to be utilised to fund the N2N Group's expansion plans, which in turn is expected to increase turnover to contribute positively to the future earnings of the N2N Group.
The proposals are subject to the approvals from Bursa Securities and shareholders of N2N at an EGM to be convened on June 23, 2014.
The proposals are expected to be completed by the third quarter of 2014.