KUALA LUMPUR (Jan 19): Taliworks Corporation Bhd (Taliworks) has proposed a placement of up to 44 million shares or 10% of its issued share capital, which, together with some 3.5 million new shares to be issued from the full exercise of its employee share option scheme, will raise up to RM84.48 million.

In a filing with Bursa Malaysia today, the public utilities operator said the expected proceeds to be raised is based on an indicative price of RM1.92 per share, and will be used for working capital purposes or future investments amounting to RM83.45 million over a period of 12 months.

The remaining RM1 million of the will be used to defray the expenses of the proposed placement.

Taliworks (fundamental: 2; valuation: 2.4) said the proposed placement shares will be placed out to the third party investor(s) to be identified later and that the issue price of the placement shares will be fixed once it has obtained all requisite approvals for the proposed placement.

"They will not be priced at more than 10% discount to the five (5)-day volume weighted average market price ("VWAMP") of Taliworks' shares immediately prior to the price-fixing date. 

"In any event, the placement shares will not be priced lower than RM0.50, being the par value of the Taliworks shares," said Taliworks.

Taliworks said it has chosen the proposed placement as it will enable the group to raise funds without incurring interest costs - compared to bank borrowings - to meet its working capital requirements and/or to fund investments, and also strengthen the company's capital base.  

It is also expected to increase the liquidity in the trading of Taliworks shares.

Taliworks said the proposed placement is not expected to have a material effect on the earnings of the group for the financial year ending Dec 31, 2015, "as the utilisation of the proceeds may take some time before they can create an impact to the company".

After the proposed placement and the full exercise of its ESOS, its gearing ratio as at Dec 31, 2013, will fall to 0.48 times from 0.56 times.

Taliworks closed nine sen or 4.71% higher to RM2 today, giving it a market capitalisation of RM833.7 million.

(Notes: 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.)