KUALA LUMPUR (July 11): Mudajaya Group Bhd has proposed to raise up to RM16.6 million via a private placement to repay part of its bank borrowings and to fund its working capital.

The placement involves the issuance of up to 62.64 million shares, representing 10% of the group’s total number of issued shares, to third party investors that have yet to be identified, Mudajaya said in an exchange filing.

The issue price of the placement shares will also be determined at a later date. However, Mudajaya guided that they may be issued based on a discount of not more than 10% to the five-day volume weighted average market price of Mudajaya shares immediately preceding the price-fixing date.

Based on an indicative issue price of 26.5 sen, Mudajaya expects the exercise to raise gross proceeds of up to RM16.6 million.

From this, Mudajaya plans to spend RM10 million to repay part of its bank borrowings. The group, as at end-March, has total borrowings of RM866.08 million.

Besides expenses for the exercise, the balance of RM6.48 million from the proceeds will be used to finance its day-to-day operations of Mudajaya, including payment to subcontractors for works undertaken for ongoing construction projects related to the Klang Valley Mass Rapid Transit Line 2 (MRT2) and Light Rail Transit Line 3 (LRT3).

Mudajaya said the private placement, subject to all approvals being obtained, is expected to be completed by the fourth quarter of 2019.

Shares in Mudajaya closed half a sen lower today at 29.5 sen, for a market capitalisation of RM174.01 million.