Muar Ban Lee plans private placement to raise RM10.04m

PETALING JAYA: Muar Ban Lee Group Bhd has proposed a private placement exercise to raise RM10.04 million to repay bank borrowings.
The group manufactures food processing equipment and produces oilseed expellers and other machinery used in oilseed crushing plants.
In a filing with the stock exchange today, the group said the expected amount raised is based on an indicative placement price of RM1.10 per share.
The proposed private placement will entail the issuance of up to 9.12 million new shares, representing not more than 10% of the issued shares of the company, at an issue price to be determined and announced at a later date.
Proceeds from the private placement will be used to repay bank borrowings, which stood at RM21.19 million as at Sept 30, 2017.
The group said the repayment of the borrowings is expected to result in an estimated saving in interest payment of RM272,000 per annum.
Its gearing ratio will improve from 0.2 times to 0.09 times upon the part repayment of the bank borrowings.
The exercise is expected to be completed by the first quarter of 2018.
The stock closed unchanged at RM1.16, with some 204,600 shares traded. It has a market capitalisation of RM105.2 million.