The electronic manufacturing service provider is planning to use the proceeds to finance its business expansion plan

EG INDUSTRIES Bhd plans to raise as much as RM22.41 million via a private placement, mainly to finance its business expansion plan.

The proposed exercise will entail the placement of not more than 10% of its issued shares at a price to be determined later, the electronic manufacturing service provider said in a bourse filing.

The group said the planned private placement will entail the issuance of up to 40.93 million new placement shares.

EG Industries said based on an illustrative issue price of 54.75 sen a share — a discount of 9.95% to the five-day volume-weighted-average-market-price of its shares up to Feb 7, 2022, of 60.8 sen — it expects to raise up to RM22.41 million from the fund-raising exercise.

Of the proceeds, it said it has earmarked RM12 million to partly finance the construction of its Batu Kawan factory to ramp up its capacity and another RM4 million to part finance the building and setting up of four additional warehouses in Sungai Petani, Kedah.

The remaining RM5.9 million will be used for its working capital and the balance to defray costs related to the cash call exercise.

The private placement is subject to Bursa Securities approval, and the group aims to complete the cash call exercise within the first half of 2023.

Shares in EG Industries ended half a sen or 0.81% lower at 61 sen today, giving the group a market capitalisation of RM260 million. — TMR / graphic TMR