KUALA LUMPUR (Oct 13): Palm oil machine manufacturer Muar Ban Lee Group Bhd plans to place up to 10% of its issued shares to independent third party investor or investors, which could raise some RM10 million to repay its bank borrowings.

It said the proposed private placement would entail the issuance of up to 9.12 million new shares at an issue price to be determined and announced at a later date.

For illustrative purposes, it said the shares could be priced at RM1.10 apiece, a 5.8% discount to the volume weighted average market price of its shares for the five market days up to Oct 10 of RM1.1677. This would raise about RM10.04 million.

The proceeds would be used to repay RM9.89 million of bank borrowings and settle the estimated expenses for the corporate exercise.

The expected debt pare down would result in an estimated interest savings of approximately RM272,000 per annum, and reduce its gearing ratio to 0.09 times from 0.2 times.

Muar Ban Lee expects the proposed private placement to be completed by the first quarter of 2018.

Its shares closed unchanged at RM1.16 for a market capitalisation of RM106.09 million.