KUALA LUMPUR: Binasat Communications Bhd is planning to place out RM5.8mil worth of new shares to pay for the development of a new data centre at its primary satellite ground station.
"Binasat will require this new data centre as its customers require support services in processing large volumes of information on a daily basis," it said in a filing with Bursa Malaysia today.
Under the fund raising plan, Binasat has proposed to issue up to 26 million new shares, or 10% of its total number of issued shares.
The placement shares are intended for third party independent investors ,to be identified at a later date.
"As the proposed private placement may be implemented in several tranches within six months, there could potentially be several price-fixing dates and issue prices," Binasat said.
For the purpose of the announcement, Binasat had assumed a price of 22.32 sen per new placement share.
The stock was last traded up 3 sen at 36 sen on Tuesday.
Binasat has earmarked RM4mil for the development the new data centre.
In March 2019, Binasat had expanded its business through the development of a new satellite teleport facility, which is expected to be completed in third quarter 2020.
A satellite teleport facility is the primary ground station of a satellite network that serves as the main connection point between the satellite and a terrestrial network, for example the Internet.
"Satellite-based communication technology has gained much importance in the past few years, especially following the roll out of the 5G network development," it said.
A data centre is a computing facility that acts as a centralised location to deliver and store shared applications and data.
"With the installation of a new data centre, the Group will be able to handle a greater flow of data at a faster pace," Binasat said.