HHRG plans to raise up to RM18.14m via placement for working capital

TheEdge Tue, Apr 23, 2024 10:05pm - 4 weeks View Original

KUALA LUMPUR (April 23): HHRG Bhd, formerly known as Heng Huat Resources Group Bhd, aims to raise between RM16.1 million and RM18.14 million through a private placement of up to 10% of its expanded issued share capital to yet-to-be identified third-party investors, at a price to be fixed.

In a filing with Bursa Malaysia on Tuesday, the biomass material manufacturer said proceeds from the proposed corporate exercise that would involve up to 98.03 million shares would be used for working capital in the biomass materials and value-added products segment.

The range of expected proceeds to be raised is based on an indicative price of 18.5 sen per share, in either a minimum scenario (where none of its outstanding warrants and share issuance scheme options are exercised prior to the exercise), or a maximum scenario (where all the outstanding warrants and options are first fully exercised).

HHRG highlighted that the proposed private placement offers a swift means of raising funds from the capital market compared to other fundraising methods.

Given that the majority of the proceeds will be allocated to the group's working capital in the biomass materials and value-added products segment, HHRG said the proposed private placement would provide additional funding without incurring extra interest costs or debt repayment obligations.

"The enlarged capital base is expected to fortify the group’s financial position and enhance future earnings as the economic and financial benefits from the proceeds materialise," it added.

TA Securities has been appointed adviser and placement agent for the corporate exercise, which is anticipated to be completed within six months from the date of approval by Bursa Securities.

HHRG shares closed half a sen or 2.5% higher to 20 sen, resulting in a market capitalisation of RM177.91 million.

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