This article first appeared in The Edge Financial Daily, on October 27, 2015.

KUALA LUMPUR: Building material manufacturer Ajiya Bhd has proposed to undertake a private placement of up to 6.92 million shares to raise RM25.96 million, mainly for working capital.

In a filing with Bursa Malaysia yesterday, Ajiya said these new shares, which represent about 10% of its total issued and paid-up share capital, are meant to be issued to independent third party investors to be identified later.

The group also said the placement shares will be priced at a discount of not more than 10% to the volume-weighted average market price for five market days, immediately preceding the price-fixing date.

Based on an indicative issue price of RM3.75, Ajiya said it expects to raise about RM25.96 million, of which 70.6% will be utilised for working capital, 17.3% for acquisition of equipment and factory facilities, 9.6% for expansion of production capacity; and the remaining, for estimated expenses incurred for the corporate exercise.

The group expects the private placement to be completed by the first quarter of 2016.