KUALA LUMPUR: YB Ventures Bhd (YVB) has proposed to undertake a private placement of up to 20 per cent of its total number of issued shares to raise between RM21.1 million and RM145.9 million.
The capital will be used to install the rooftop solar photovoltaic (PV) system at its factory building and warehouse in Kulai, Johor Bahru, future viable investments and working capital.
YBV executive director Datuk Au Yee Boon said the installation of the solar PV system is timely and complements the company’s plan to install four new production lines to expand production capacity.
“With reduced electricity consumption, the installation of the solar PV system will also reduce the company’s environmental impact due to the energy-intensive nature of our manufacturing activities,” he said in a statement today.
A filing with Bursa Malaysia today shows that the shares will be placed to third party investors at an issue price that will be fixed at a later date.
YVB will issue the placement shares at a price of not more than a 10 per cent discount to the five-day volume-weighted average market price (VWAP) of YBV shares immediately preceding the price-fixing date.
For illustrative purposes, the indicative issue price of the placement shares is assumed at RM0.43 per share, which represents a discount of approximately 9.93 per cent to the 5-day VWAP of YBV shares up to and including the latest practicable date of RM0.48 per share, the company’s Bursa Malaysia filing noted.
YBV expects to raise gross proceeds between RM21.1 million and RM145.9 million.
Under the minimum scenario, around 75 per cent of the proceeds raised will be utilised to fund the installation costs of the solar PV system for the company’s factory building and warehouse in Kulai, Johor Bahru.
Whereas under the maximum scenario, a total of RM16.0 million is allocated for installing the solar PV system, RM94.8 million is earmarked for the future viable investments of the company, and RM35.0 million is to be utilised as working capital.
Au further noted that the private placement exercise would enable the company to raise additional funds without incurring interest costs compared to conventional bank borrowings.
In addition, it will also provide the company with an expeditious fundraising alternative from the capital market as opposed to other forms of fundraising and increases the size and strength of the company’s shareholders’ funds.
“We remain optimistic of the company’s future prospects, as Malaysia has resumed interstate and overseas travel starting today.
“For us, our priority remains our commitment to fulfilling the backlog of orders that have built up since the Full Movement Control Order (FMCO), which started on 1 June 2021,” Au said.
He is also optimistic that the property, construction and building material sectors are poised for a rebound, in tandem with the positive economic growth slated for 2022.
“Towards the fourth quarter of 2021, we have seen pent-up demand for properties, an effective vaccine rollout programme and low-interest rates.
“All these are set to bolster businesses that took a hit since last year,” he said.