KUALA LUMPUR (Dec 15): Hubline Bhd is raising fresh funds again to pare down debts. The loss making shipping company has proposed a private placement of up to 10% of its issued capital, aiming to raise maximum gross proceeds of about RM23.02 million.

The proposal comes on the heel of the company's issuance of redeemable convertible notes (RCN) to raise RM80 million fresh capital.

In a Bursa Malaysia filing today, Hubline said the proceeds from the proposed share placement would be used for partial repayment of borrowings, capital expenditure, partial payment of secured container shipping business creditors, working capital, as well as expenses related to the exercise.

"The board has decided to raise additional funds through the proposed private placement to further reduce the group's existing borrowings, to expand its dry-bulk business and to settle amounts owing to creditors related to the group's container shipping business," it said.

As at Sept 30, Hubline's total borrowings were at RM133.3 million.

The proposed private placement is expected to be implemented in multiple tranches within six months from the date of approval of Bursa Malaysia, or any extended period as may be approved by the exchange.

Hubline noted that the exact amount of the gross proceeds to be raised from the proposed exercise will depend on the actual issue price and the actual number of placement shares to be issued, which will be determined at a later date.

Hubline's share price has had a roller coaster ride in the past four months since September. Its share price surged to a high of 19 sen in late October and soon it reversed the upward trend, falling to 10 sen today.

On the issuance of RCN, the proceeds raised have been set aside to repay borrowings, which are mainly related to the container shipping business (approximately RM17.53 million) and to finance the acquisition of two new barges for its dry-bulk business (approximately RM4.69 million).