Scope Industries plans private placement to fund expansion

TheEdge Thu, Feb 14, 2019 07:03pm - 5 years View Original


KUALA LUMPUR (Feb 14): ACE-Market listed Scope Industries Bhd has proposed to undertake a private placement of up to 66.91 million new shares, representing 10% of its total issued share capital, to fund its electronic manufacturing business expansion.

The company said in a stock exchange filing today the issue price and third-party investors it intends to place the shares out to, have yet to be determined.

However, based on an illustrative issue price of 13.5 sen — based on its five-day volume weighted average market price and a one sen discount — Scope Industries may raise up to RM9.03 million.

Of this, RM4 million will be earmarked for its electronic manufacturing business expansion within 12 months. This may include acquiring peers, land, factories, or machinery, to increase Scope's production capacity.

Another RM4.95 million will go to the group’s working capital, for the payment to trade creditors, staff, and other administrative and operating expenses, while the balance of RM80,000 are estimated expenses for the proposed corporate exercise.

In justifying the private placement, Scope said the cash call is the “most appropriate avenue” as it allows the company to preserve cash flow and strengthen its equity base and liquidity.

The company, which is principally involved in the trading and manufacturing of electronic components and in the business of oil palm plantations, will require the approval of its shareholders and regulatory authorities for the proposed fundraising exercises.

Barring any unforeseen circumstances, the board expects the proposed private placement to be completed by the second half of 2019.

Shares in Scope closed one sen or 7.41% up at 15 sen in thin trade today, for a market capitalisation of RM81.27 million.

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