KUALA LUMPUR (Dec 29): Genetec Technology Bhd has proposed a private placement of 3.76 million new ordinary shares to raise as much as RM3.92 million for additional working capital.

Genetec, which is involved in the design and manufacturing of automated industrial systems, said the issue price of the shares, which would be determined at a later date, may be pegged at a discount of not more than 10%.

“The proposed private placement will enable Genetec to raise funds without incurring interest costs, which would otherwise arise if the group were to borrow further to fund its working capital requirements,” it said in a filing with Bursa Malaysia today.

For illustrative purpose, it said the Proposed Private Placement may raise gross proceeds of up to RM3.92 million assuming the Placement Shares are placed out at an indicative issue price of RM1.04 per Placement Share.

While the proposed private placement is expected to contribute positively towards Genetec’s future earnings as it provides extra working capital, the group added that its earnings per share would be diluted.

In the meantime, its gearing is expected to be diluted to between 0.23 to 0.25 times from 0.27 times currently.

Genetec said that the placement shares will share the rank of its existing shares, except that they would not be entitled to any dividend, rights, allotments and/or other distributions declared before the date of their allotment.

The shares are to be issued to independent third party investors to be identified at a later date, the group siad.

KAF Investment Bank was appointed as the advisor and sole placement agent for the proposed private placement.

Genetec must obtain approval for the placement from the relevant authorities, having already secured its shareholders’ approval at its last annual general meeting on Aug 29, 2017.

Shares in the group closed up 2 sen or 1.72% at RM1.18, giving the group a market capitalisation of RM41.88 million.