KUALA LUMPUR: Sumatec Resources Bhd, which had a negative operational cash flow of RM46.02mil last year, has proposed a private placement to raise an estimated RM20.5mil to finance its day-to-day working capital requirements.
The upstream oil and gas player told Bursa Malaysia that up to 386.61 million new shares (10% of its current paid-up capital) would be issued.
Subject to the prevailing market conditions, the proposed private placement may be implemented in multiple tranches within six months from the date of approval of Bursa Malaysia Securities Bhd or any extended period approved by the regulator.
Therefore, Sumatec said, there could potentially be several price fixing dates depending on the number of tranches and timing of implementation.
The company said the proposed exercise would raise gross proceeds of up to RM20.49mil based on an indicative issue price of 5.3 sen per placement share - about 8.78% discount to the volume-weighted average market price of Sumatec shares for the five market days up to the latest practicable date of 5.81 sen.
Other than the estimated expenses of RM750,000, the proceeds would be used totally for the working capital requirements, including staff salaries/allowances (RM7.2mil) and rental and utilities (RM3mil) within 12 months.
Sumatec said the proposed private placement was expected to be made within two months.
“The proposed private placement is an interim proposal to meet the immediate funding needs of the Sumatec group pending the implementation of the comprehensive series of fund raising and securities issuance proposals as announced on Feb 17,” Sumatec said.
The proposals announced in February included a private placement of up to 1 billion shares in Sumatec to independent third-party investors, issuance ofup to 800 million Sumatec shares as payment to contractors at the Rakushechnoye oil and gas field in Kazakhstan, and a 1-for-2 rights issue together with one warrant for every rights share subscribed.
The 1 billion placement shares were at that time assumed to be issued at an indicative price of 8 sen each, thus raising RM80mil in gross proceeds.
Sumatec share closed unchanged at 6 sen on Wednesday, with 1.14 million shares changing hands.
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