KUALA LUMPUR (May 21): London Biscuits Bhd has aborted plans to undertake a renounceable rights issue, together with free detachable warrants, as well as a bonus issue as proposed on June 23 last year.

However, it will proceed with the proposed private placement of up to 22.38 million new shares, representing 10% of the company's share capital, to raise up to RM10.07 million to repay borrowings. As at May 17, 2018, the total bank borrowings of the group stood at RM258.45 million.

It did not disclose the reason for the termination of the earlier proposals.

In a filing with Bursa Malaysia today, London Biscuits said for illustrative purposes, based on the indicative issue price of 45 sen per placement share, the group is expected to raise gross proceeds of between RM8.39 million and RM10.07 million from the proposed private placement.

The placement shares are proposed to be placed out to independent third party investor(s) to be identified at a later date.

"The proposed private placement will allow the group to expeditiously raise funds for the repayment of bank borrowings, which will reduce the future interest expenses of the group and hence improve its cash flow position," said London Biscuits.

"Barring any unforeseen circumstances, the proposed private placement is expected to be completed by the third quarter of 2018," it added.

London Biscuits shares closed 0.5 sen or 0.98% lower at 50.5 sen, with 32,000 shares done, bringing a market capitalisation of RM94.2 million.