PETALING JAYA: Binasat Communications Bhd has proposed to undertake a private placement to raise up to RM23.3mil for working capital and to enhance its fibre optic network installation and commissioning service capability.
In its filing with Bursa Malaysia, the company said the proposed exercise would entail up to 64.72 million new ordinary shares in Binasat, representing not more than 20% of the total number of issued shares of the company to third party investors to be identified later at an issue price to be determined later.
Binasat’s shares closed 2.5 sen lower at 37 sen yesterday.
Based on an assumed issue price of 36 sen per placement share, the proposed exercise is expected to raise RM23.3mil.
Of that, RM21.8 would be used for working capital and RM1.3mil to enhance its network installation and commissioning service capability.
The remainder would be used to finance the expenses for the proposed private placement.
“With the introduction of fifth generation (5G) networks in Malaysia, the group expects the demand for network facilities to increase in order for Malaysia to achieve a nationwide 5G network,” Binasat said.
“Hence, the board believes that its plan to enhance the group’s fibre optic network installation and commissioning service capability would allow it to capture a part of the growing demand for fiber optic network installation and commissioning services as well as to participate in large-scale fiber optic network projects, and therefore improve the group’s financial performance,” it added.
Binasat noted the financing of working capital is mainly for the group’s fiber optic telecommunications network supporting services such as payment for subcontractors and purchase of raw materials.
It said the proposed private placement may be implemented in tranches, as this enables the company to raise funds expeditiously on an “as needed” basis.
“Upon completion of the proposed private placement, the enlarged capital base is also expected to strengthen the financial position of the company,” it added.