KUALA LUMPUR: Sarawak Cable Bhd has proposed to raise RM53.90mil from a share placement and the most of the funds would be used to repay its borrowings.
The cable manufacturer said on Friday the placement would involve 10% of its paid-up share capital or 31.70 million new shares.
It added the indicative issue price of the placement shares will be RM1.70, or 6% below the five-day average trading price of RM1.80.
“The proposal will enable the group to raise funds to strengthen its capital structure and reduce its dependency on bank borrowings by way of repayment of bank borrowings which will reduce interest expenses. It would allow the group to better manage its gearing level and add flexibility to its cash flow management to fund its operations for future expansion when opportunities arise,” it said.
The company had in December 2014 completed its acquisition of Universal Cable (M) Bhd and Leader Cable Industry Bhd, both leading manufacturers of cables and wires in Malaysia.
Over the past 12 months, the group had focused on post-acquisition integration and streamlining of its various manufacturing operations and facilities. This provided it with the strong base to look for opportunities locally and regionally.