Mieco to undertake private placement exercise

KUALA LUMPUR: Mieco Chipboard Bhd intends to undertake a fundraising exercise via a private placement, involving the issuance of new shares of up to 20 per cent of the total issued shares of the company to third-party investors to be identified later, at an issue price to be determined later.

Based on the indicative issue price of 44.7 sen per placement share, the proposed private placement is expected to raise gross proceeds of up to RM75.1 million, the chipboards manufacturer said in a filing to Bursa Malaysia today.

It said proceeds from the exercise are mainly intended to finance its proposed acquisition, either in whole or in part, subject to the successful procurement of placees and implementation of the placement.

"On Oct 6, Mieco has entered into a conditional share sale agreement with SYF Resources Bhd for the acquisition of the entire equity interest in Seng Yip Furniture Sdn Bhd, a wholly-owned subsidiary company of SYF, for a purchase consideration of RM50 million to be satisfied entirely via cash,” it said.

It said any excess in the actual gross proceeds raised and the intended gross proceeds raised from the proposed private placement would be allocated for its working capital.

Meanwhile, in view of the interests of Datuk Seri Ng Ah Chai and Ng Wei Ping in both Mieco and SYF, the proposed acquisition is deemed as a related party transaction. - Bernama
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