JAKS Resources Bhd is planning to raise up to RM74.4 million by undertaking a private placement of up to 292.2 million new shares in the group, which represents 10% of its existing shares.

The RM74.4 million to be raised is based on an illustrated issue price of 25.4 sen per placement share, whereby RM43 million will be used to repay credit facilities and lower its net gearing ratio to 0.21 times, from 0.28 times as at end September.

Meanwhile, RM30.7 million will be used as working capital, while the remainder will be used to cover expenses related to the private placement.

JAKS Resources said it has entered into a call option agreement with Kenanga Investment Bank Bhd for up to 209.03 million placement shares to facilitate the exercise.

“We take this opportunity to strengthen our financial position and to be in a better position to secure more projects particularly in the renewable energy space. This comes at a time of rising interest rates, recession risks and global uncertainties ahead,” JAKS Resources CEO Andy Ang Lam Poah said.

“The repayment of borrowings will help reduce the interest expenses by approximately RM2.8 million per year. With a stronger financial position and capital base, the company will be better poised for growth going ahead,” he added.

JAKS Resources ended trade half a sen or 1.82% higher at 28 sen yesterday, for a market capitalisation of RM595.74 million. — TMR / pic Bernama