KUALA LUMPUR (Aug 9): Asdion Bhd has proposed a private placement of up to 10% of its issued shares, or up to 16.49 million new placement shares, to raise RM3.79 million to pay overdue finance lease liabilities and trade creditors.

The issue price is to be determined at a later date, but Asdion said assuming an indicative price of 23 sen per share — a discount of approximately 4.64% to the volume weighted average market price of Asdion's shares for the five market days up to Aug 8, 2018 of 24.12 sen — the proposed private placement is expected to raise gross proceeds of up to approximately RM3.79 million.

"As at June 30, 2018, the group's finance lease liabilities and trade creditors stood at RM1.22 million and RM3.81 million, respectively," the logistics solutions provider said in a bourse filing today, adding the private placement may be implemented in multiple tranches within six months, or any extended period, from the date of approval from Bursa Malaysia.

To meet the group's working capital needs in the short term, Asdion said the board is of the opinion that the private placement is the most cost-effective source and the most expeditious way of fund raising from the capital market as opposed to other forms of fund raising. However, it noted that it will proportionately dilute the earnings per share of the group as a result of the increased number of shares.

Asdion shares settled 0.5 sen lower or 2.08% at 23.5 sen for a market capitalisation of RM27.32 million.