KUCHING: Borneo Oil Bhd is eyeing to raise up to RM35.3mil from a proposed private place- ment to finance its diversification into mineral exploration and production activities, as well as for investment in a new food processing plant here.
The planned exercise will involve an issuance of up to 20% of its issued and paid-up share capital, and will be implemented after a proposed par value reduction to offset its accumulated losses.
Borneo Oil, which owns fast food chain SugarBun, proposes to cancel 90 sen of the par value per existing share of RM1 in its issued and paid up share capital. The exercise would give rise to a credit of RM208.1mil under the minimum scenario; and RM256.2mil under the maximum scenario, it said in a filing with Bursa Malaysia.
As at Dec 31 last year, Borneo Oil’s accumulated losses stood at RM35.14mil.
The indicative price of the placement shares is 62 sen, representing a 7.5% discount to the five-day weighted average market price of 67 sen of the ordinary shares of RM1 apiece prior to the announcement of the proposal.
The total number of placement shares to be issued would be determined after the completion of the par value reduction, the company said, adding that these new shares would be placed out to third party investors.
The minimum amount to be raised would be about RM28.7mil while the maximum would be RM35.3mil. The proposed fundraising exercise is expected to be completed by the fourth quarter of this year.
“If the amount raised is RM35.3mil, Borneo Oil would utilise RM10mil to purchase new mining plant and equipment; or RM5mil if the proceeds are only RM28.7mil.
“In both scenarios, RM5mil each from the proceeds would go to fund exploration activities and setting up of new food processing factory for our existing fast-food business.
“Another RM5.3mil would be for repayment of hire purchase, RM1.3mil for expenses related to the private placement, and the balance as working capital,” it added.