CWorks plans RM4.96m private placement; unaware of reason for UMA

-A +A

KUALA LUMPUR (Jan 26): CWorks Systems Bhd said it is unaware of any reason that may have contributed to the recent sharp rise in the price of its shares.

"After making due enquiry on the matter, the company and board are not aware of any corporate development relating to the group's business and affairs that may have contributed to the unusual market activity (UMA)," it said in response to an UMA query by Bursa Malaysia today.

The ACE-Market listed software specialist also said it is not aware of any rumour or report concerning the business and affairs of the group that may account for the unusual trading activity.

It saw its share price rose as much as 9% to touch its intraday high of 54.5 sen before easing 3 sen or 6% to close at 53 sen today. Its market capitalisation stood at RM60.5 million.

In a separate filing today, CWorks proposed to undertake a private placement to raise up to RM4.96 million, assuming an indicative issue of 41 sen per placement share, to be used to develop a new software system for stock maintenance.

The proposed private placement will involve the issuance of up to 12.1 million new shares, or 10% of the existing issued share capital of the group, at an issue price to be determined and announced later.

The group expects to complete the corporate exercise during the second quarter of 2016.

"By capitalising on the recent up-trend of the group's share price, the proposed private placement will also strengthen the capital base of CWorks to support the continuous business growth of its subsidiaries," it said.

Since the beginning of the year, CWorks' share price has surged 51.4% from 35 sen.

In November 2015, CWorks had aborted its plan to acquire metal articles manufacturer TNM MFG Sdn Bhd due to a non-agreement on the terms and conditions between the company and the vendors. However, the group said its proposed diversification into the manufacturing of metal articles is still ongoing.

(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)