It intends to use a portion of the proceeds to fund the development of foreign workers housing under the FWAP

By HARIZAH KAMEL / Pic BERNAMA

MYEG Services Bhd has proposed to undertake a placement to raise proceeds of up to RM407 million to partly fund its plan to develop hostels for foreign workers and services on healthcare.

The group said it intends to place out up to 220 million new shares that represent up to 6.29% of its total issued shares to third-party investors to be identified, according to an exchange filing yesterday.

The issue price of the placement shares will be announced at a later date and will be determined by way of a book-building process.

MyEG said it will be fixed at a price which is not more than 10% discount to the five-day volume-weighted average market price of its shares prior to the price-fixing date. However, the group has set the issue price of RM1.85 for illustrative purposes in its statement.

Of the total proceeds, it expects to use RM168 million for the development of healthcare-related services and RM126 million for the purchase of fixed assets and related solutions for the e-government concession services.

Another RM94.5 million is intended for foreign workers’ hostels under the foreign workers accommodation programme (FWAP), while RM9.4 million is for estimated expenses for the proposed placement. The remaining RM9.1 million is for working capital.

On its existing projects, the group intends to use a portion of the proceeds to fund the development of centralised and integrated living quarters or hostels for housing foreign workers under the FWAP.

One of the projects is located in Tanjung Langsat in Johor, whereby the company has leased a parcel of land which will be used to develop a hostel for foreign workers. Any excess of the funds not used for the Tanjung Langsat project will be allocated to future FWAP projects.

The group also plans to expand its services by setting up health screening checkpoints throughout the country, subject to appointment by the relevant authorities.

The group on Monday announced that it agreed to cooperate with China’s Anhui Zhifei Longcom Biopharmaceutical Co Ltd (Zhifei) in conducting Phase 3 clinical trials and subsequent commercialisation of Zhifei’s Covid-19 vaccine in Malaysia.

The group will also be working towards obtaining halal certification for the vaccine from the Department of Islamic Development Malaysia.

On the e-government concession services, the group is involved in the provision of electronic delivery of vehicle registration, driver and vehicle licensing, and payment of summons services for the Road Transport Department (JPJ).

The group has expanded the JPJ services to an online renewal of motorcycle road tax and competent driving licences, which are in line with the government’s plan to accelerate consumer adoption of e-government services.

MyEG intends to use part of the proceeds to purchase fixed assets and related solutions for the JPJ services, which will be located in the company’s premises and their business partners’ premises, for the online road tax renewals for cars and motorcycles.

The breakdown of proceeds for working capital has not been determined and will be dependent on the operating and funding requirements at the time of utilisation.

The estimated expenses for the proposed placement consist of professional fees, estimated placement fees and fees payable to the relevant authorities and other miscellaneous costs to be incurred.

Any variation to the estimated expenses will be adjusted to or from the amount allocated for working capital.

Trading of the group’s shares was suspended yesterday from 2.30pm to 5pm in relation to the proposed placement.

MyEG’s shares last traded four sen or 2% lower at RM1.96, valuing the company at RM7.16 billion.