KUALA LUMPUR (Jan 18): AE Multi Holdings Bhd plans to raise up to RM3.29 million in a private placement to repay bank borrowings and for working capital.

AE Multi said the proposed private placement will allow the group to pare down its debt, hence enabling it to save on finance costs as well as reduce its gearing level.

The funds raised will also enable it to further expand its operations, as well as strengthen its capital base to support its business growth, it added.

In a filing with Bursa Malaysia today, AE Multi said the private placement will involve the issuance of up to 29.94 million new shares, representing not more than 10% of the group's issued share capital.

Assuming the issue price of the placement shares is 11 sen each, which represents a discount of 5.5% to the five-day volume weighted average price of 11.64 sen on Jan 17, 2018, the gross proceeds raised are expected to be RM3.29 million.

Proceeds of RM2.5 million will be used to partially pay bank borrowings amounting to RM34.24 million as at Dec 31, 2017, while RM663,444 will be for working capital and RM130,000 for expenses in relation to the proposed exercise.

M&A Securities Sdn Bhd has been appointed as the adviser and placement agent for the proposed private placement, which is expected to be completed by the first quarter of 2019.

AE Multi shares closed up one sen or 8.33% at 13 sen, with 669,000 shares done, bringing it a market capitalisation of RM35.93 million.