KUALA LUMPUR (Nov 13): ACE Market-listed Sterling Progress Bhd has proposed to raise up to RM6 million via private placement to third-party investors to be identified later.

It said proceeds from the proposed exercise will be used for the purchase of smartphones and laptops for its information, communication and technology (ICT) segment.

In a filing with Bursa Malaysia today, Tiger said the proposed private placement will involve the issuance of up to 32.13 million shares assuming none of its outstanding warrants is exercised, representing not more than 10% of its issued shares. As at Nov 8, Sterling has an issued share capital of RM46.93 million comprising 321.29 million shares and 78.75 million outstanding warrants.

The placement shares will be priced at not more than 10% discount to the five-day volume weighted average market price (VWAMP) of Sterling shares.

Assuming the placement shares are issued at an indicative issue price of 15 sen per placement share, representing a 9.42% discount to the 5-day VWAP of Sterling shares of 16.56 sen, the proposed exercise is expected to raise gross proceeds of between RM4.82 million and RM6 million.

The group said it intends to utilise the proceeds of up to RM4.4 million from the proposed private placement for the purchase of smartphones and laptops for its ICT segment. Another RM1.5 million will be used for working capital.

"As the proposed private placement is expected to be completed by end of 2018, it is expected to contribute positively to the earnings of the group for the financial year ending June 30, 2019 when the benefits of the utilisation of proceeds are realised within 12 months from
the date of listing of the placement shares," said Sterling. 

Sterling shares were untraded today. It last closed at 18 sen yesterday, bringing a market capitalisation of RM59.44 million.