KUALA LUMPUR (Feb 21): Brahim’s Holdings Bhd has proposed a private placement of up to 23.63 million new shares — representing 10% of its share capital — to raise cash for working capital purposes and to repay borrowings.

Assuming an indicative price of 42 sen per placement share, the group said the exercise could potentially raise up to RM9.92 million, out of which RM9.19 million has been earmarked for repayment of bank borrowings and RM485,000 for working capital.

If it raises proceeds of RM9.92 million, its net current assets will improve to RM56.4 million, compared with RM41.01 million as at Dec 31, 2016, the group said in a stock exchange filing.

Upon full issuance of the placement shares, Brahim’s share base will grow to 259.91 million shares or RM278.19 million, from 236.28 million shares or RM268.27 million currently.

“The proposed private placement will enable the group to obtain fresh funds without incurring further finance costs compared to other options of fund-raising exercise, such as debt financing,” said Brahim’s.

“Assuming the proceeds raised of RM9.19 million is used to repay the term loans, it would result in interest savings of approximately RM652,000 to RM698,000 per annum to the group based on the interest rate of the term loan of approximately 7.1% to 7.6% per annum,” said Brahim’s.

It added that the proceeds raised will enable the group to have better control and flexibility over its cash flow.

Brahim’s share price closed unchanged at 34.5 sen, giving it a market capitalisation of RM81.52 million.