KUALA LUMPUR (March 22): Kronologi Asia Bhd has proposed to undertake a private placement of up to 104.68 million new shares in the IT firm to independent third-party investors, a move that will help the company raise additional funds expeditiously for business expansion.

In a Bursa Malaysia filing today, Kronologi, which offers enterprise data management services, said the company, pursuant to its shareholders’ approval, can issue up to 104.68 million new shares, which represent not more than 20% of the company’s 523.38 million issued shares.  

The placement shares' issue price will be fixed at a later date, according to Kronologi. "The proposed private placement is expected to strengthen the company’s capital base, as well as improve the group’s financial position and future earnings when the economic and financial benefits from the use of proceeds are realised,” it said.

Based on the indicative issue price of 67.83 sen per placement share, the company is expected to raise gross proceeds of up to approximately RM71 million, according to Kronologi.

Among others, Kronologi has earmarked RM50 million for business expansion, which will include the acquisition of companies or businesses which complement Kronologi’s existing businesses.

"Barring any unforeseen circumstances, the board expects the proposed private placement to be completed within 6 months from the date of approval from Bursa or any extended period as may be approved by Bursa.

"The application to Bursa in relation to the proposed private placement is expected to be submitted within 2 weeks from the date of this announcement,” Kronologi said.

TA Securities Holdings Bhd is the adviser and placement agent for Kronologi's private placement of new shares according to Kronologi.

At 5pm today, Kronologi's share price closed down 2.5 sen or 3.4% to 71 sen, which values the group at RM371.6 million based on the company's number of issued shares at 523.38 million.

Upon completion of the 104.68 million new share placement, Kronologi said it will have an enlarged share capital of 628.05 million units.