DHB proposes private placement to raise RM14.8m

By BERNAMA / Pic source dbhd.com.my

DAMANSARA Holdings Bhd (DHB) has proposed to undertake a private placement of its shares to raise an estimated RM14.76 million for working capital purposes. 

In a filing to Bursa Malaysia on Monday, DHB, formerly known as Damansara Realty Bhd, said the proposed private placement entails the issuance of up to 31.84 million new ordinary shares, representing up to 10%of the total number of DHB shares in issue. 

The private placement shares are to be placed to independent third party investors at an issue price, both of which will be determined later. 

Based on the illustrative issue price of RM0.473 per placement share, the exercise is expected to raise RM14.76 million in gross proceeds. 

“The proceeds are expected to be utilised for mobilisation costs for new projects, administrative and overhead expenses, and repayment to trade creditors and suppliers,” the company said. 

Based on the unaudited three-month financial period ended Sept 30, 2021, the DHB group’s existing business incurred an operating loss of RM3.62 million while cash and bank balances stood at RM24.22 million. 

The operating loss was due to increasing cost of operations and competitiveness to secure new projects. 

“The group’s existing cash is mainly tied to ongoing projects and thus are not available to be utilised for operating expenses. 

“The proposed private placement will provide the requisite funds to undertake new projects and meeting the group’s operating obligations,” it said. 

It said the proposed private placement is expected to have a positive impact on the future earnings of the group by providing it with the necessary funding to maintain and grow its existing businesses. 

The proposed private placement, expected to be completed by the third quarter of 2022, will enable the group to tap into the equity market to raise funds without incurring additional interest cost associated with bank borrowings, thereby, minimising any potential cash outflow in respect of interest servicing costs and preserving the group’s cash flow and directly enhancing shareholders’ value. 

As at Jan 28, 2022, being the latest practicable date prior to the announcement, the issued share capital of the company is RM159.35 million comprising 318.38 million shares. 

DHB’s main business is properties and land development and integrated facilities management. It was reported last year that state-owned investment company Johor Corp is in the middle of privatising DHB. 

Separately, DHB also told Bursa Malaysia the contract tenure of its group COO Azhari Abdul Hamid ended yesterday and he will be appointed as the MD of HC Duraclean Sdn Bhd, a subsidiary of DHB. 

Azhari holds 291,854 ordinary shares representing 14.59% stake in HC Duraclean.