KUALA LUMPUR (April 29): PMB Technology Bhd has proposed to raise up to RM151.44 million through two private placements for the expansion of the group’s metallic silicon manufacturing plant and working capital.

In a filing with Bursa Malaysia today, PMB Tech said the first placement could raise up to RM48.65 million, of which RM48.46 million is meant to fund the group’s working capital, while the remaining RM190,000 will be used for expenses related to the placement exercise.

The first placement issuance size is up to 16.16 million new shares, representing 10% of its existing issued shares as at April 25 this year.

These shares will be placed to independent third party investors, and will not be priced at more than 10% discount to the five-day volume weighted average market price (VWAP) before price-fixing date.

The second placement is estimated to raise up to RM102.79 million, of which RM42.31 million is meant for expansion of the group’s manufacturing plant, RM60 million for purchase of equipment, and RM480,000 for expenses related to the second placement. It entails an issuance of up to 32.32 million new shares, representing 20% of the group’s issued shares as at April 25.

Half of the second placement will be placed to PMB Tech’s executive chairman Tan Sri Koon Poh Keong, chief executive officer Koon Poh Ming, and executive directors Datuk Koon Poh Tat and Koon Poh Weng.

Each of them has given their irrevocable undertaking to subscribe to 4.04 million shares or 12.5% of the second placement. The other half of the second placement will be issued to independent third-party investors to be identified at a later date.

The estimated fund to be raised from these two placements are based on the five-day VWAP as at April 25, which is RM3.3444.

PMB Tech said in line with its strategy to grow its recurring income and expand its existing business, particularly in the manufacturing of metallic silicon, it intends to further expand the production to meet existing and potential customers’ demand.

“In this regard, the group requires additional funds of RM300 million to construct the Phase 2 PMB Silicon Facility to further expand the production line to meet the expected increasing demand for metallic silicon,” it said.

“The Phase 2 PMB Silicon Facility will be able to increase its production capacity to 72,000 tonnes of metallic silicon per year from the existing production capacity of 36,000 tonnes of metallic silicon. This is expected to achieve the economies of scale and contribute positively to the future financial performance of the group.

“The total capital expenditure (capex) required for the setting up (construction and purchase of equipment) of the Phase 2 PMB Silicon Facility amounts to RM300 million. The capex will be funded via the second placement of RM102.2 million (34.07%), bank borrowings of RM180 million (60%) and internal funds of RM17.8 million (5.93%),” it added.

PMB Tech estimated the first placement to be completed by the second quarter of this year and the second placement to be completed by the third quarter.

PMB Tech’s share price fell one sen or 0.3% to RM3.34 today, giving it a market capitalisation of RM522.98 million.