KUALA LUMPUR (Feb 17): Credit-reporting agency CTOS Digital Bhd plans to raise RM270 million via a private placement of up to 166.67 million new shares at an indicative RM1.62 each to fund proposed acquisitions and investments to further grow its business.

In a Bursa Malaysia filing on Thursday (Feb 17), CTOS said the placement shares are intended to be placed out to third party investors and the corporate exercise is expected to be implemented in a single tranche within six months from the date of approval from the bourse regulator for the listing and quotation of the placement shares on the Main Market of Bursa.

"The proposed placement is not expected to have any material effect on the earnings of the CTOS Digital group for the financial year ending Dec 31, 2022, save for the dilution in EPS (earnings per share) as a result of the increase in the number of CTOS Digital shares in issue pursuant to the proposed placement.

"As at the LPD (latest practicable date of Jan 31, 2022), there are 2.2 billion (2,200,000,000) CTOS Digital shares in issue.

"Barring any unforeseen circumstances, the proposed placement is expected to be completed by the first quarter of 2022,” CTOS said.

According to CTOS, the placement of the new shares will enlarge its number of issued shares to 2.37 billion.

CTOS, which has proposed to acquire a 49% stake in enterprise software specialist Juris Technologies Sdn Bhd for RM205.8 million, is also buying an additional 2.25% equity interest in Business Online Public Co Ltd (BOL), which provides business support services.

According to CTOS, out of the RM270 million placement share proceeds, RM205.8 million will be used to finance the acquisition of the 49% stake in Juris while RM34.9 million has been allocated for the purchase of the additional 2.25% equity interest in BOL.

Meanwhile, RM25.6 million has been set aside for "acquisitions to be identified”.

"One of the company’s ongoing plans is to selectively pursue acquisitions and investments in companies as part of its growth strategy. CTOS Digital typically seeks assets that have direct cost and capability synergies with its digital solutions, enabling it to expand its digital solutions offering, achieve value chain integration for its existing segments and customers, and facilitate entry into new verticals. 

"In the event the company is unable to fully utilise the proceeds allocated for acquisitions to be identified, such unutilised amount will be used for the working capital requirement of the group,” CTOS said.

Maybank Investment Bank Bhd has been appointed as principal adviser to CTOS and joint placement agent for the proposed new share placement, according to CTOS.

The other joint placement agents for the proposed share placement are CIMB Investment Bank Bhd, Credit Suisse Securities (M) Sdn Bhd, Credit Suisse (Singapore) Ltd and RHB Investment Bank Bhd, CTOS said.

At 5pm on Thursday, CTOS’ share price closed two sen or 1.14% lower at RM1.73, giving the company a market capitalisation of RM3.81 billion.

The stock saw 1.39 million shares traded.