Vivocom proposes private placement

PETALING JAYA: ACE Market-listed Vivocom Intl Holdings Bhd has proposed a private placement of up to 10% of the total number of issued shares to raise funds for repayment of borrowings and general working capital.

In a filing with Bursa Malaysia yesterday, the group said the indicative issue price of the placement shares is assumed at 11 sen per placement share, which represents a discount of about 9.32% to the five-day volume weighted average market price of Vivocom shares up to and including the latest practicable date (June 19, 2017) of 12.13 sen per share.

Based on the indicative issue price of 11 sen per placement share, the proposed private placement is expected to raise gross proceeds of between RM35.58 million (under minimum scenario) and RM47.87 million (under maximum scenario).

Of the proceeds raised, RM10 million has been allocated for repayment of borrowings, RM300,000 for estimated expenses related to the exercise and the balance for general working capital.

As at Dec 31, 2016, the group’s total borrowings stood at RM37.94 million with gearing ratio at 0.08 times. After the proposed private placement, the borrowings are expected to be reduced to at least RM27.94 million while gearing ratio would be reduced to at least 0.06 times.

The placement shares will be placed out to third party investors to be identified at a later stage and RHB Investment Bank Bhd, the adviser for the proposed private placement, will be appointed as the placement agent.

The exercise which will need Bursa Securities’s approval, is expected to be completed by the third quarter of 2017.