KUALA LUMPUR (Aug 4): Aemulus Holdings Bhd plans to raise up to RM23.62 million via a private placement to fund potential business investments and reduce bank borrowings.
The group has proposed to undertake a private placement of up to 54.94 million shares representing 10% of its total number of issued shares to third-party investors to be identified later, it said in a bourse filing today.
The enlarged number of issued share capital will be 604.42 million post private placement, according to its filing.
The issue price, it said, will also be determined later by the group's board of directors.
As at yesterday, being the latest practicable date (LPD) prior to this announcement, Aemulus said its share capital was RM59.44 million comprising 549.48 million shares.
"However, the actual number of placement shares to be issued in relation to the proposed private placement will depend on the total number of issued shares of the company on a date to be determined later after obtaining all relevant approvals for the exercise.
"For illustrative purposes, the indicative issue price of the exercise is assumed at 43 sen apiece, which represents a discount of about 8.51% to the five-day weighted average market price of Aemulus shares up to and including the LPD of 47 sen," it said.
Aemulus has earmarked a portion of the placement proceeds for the group's plan to finance any suitable and viable potential business investments that "complement the group's existing business and which may generate positive returns to the group in the future".
It also plans to use the proceeds for research and development (R&D), marketing, branding, customer support and general working capital besides reducing existing bank borrowings.
Barring any unforeseen circumstances, the group said it expects the proposed private placement to be completed by the first quarter of 2021.
Commenting on its financial performance, Aemulus said it reported a loss after tax of RM4.65 million for the nine-month period ended June 30, 2020 compared with a profit after tax of RM500,000 a year earlier.
Revenue for the period also dropped 43.13% to RM12.11 million from RM21.29 million previously, mainly due to the soft demand from the enterprise storage segment, Covid-19 pandemic impact and implementation of travel restrictions locally and globally.
"The group has undertaken various actions to improve the business performance including changing its product strategy from generic platform to application specific and niche platform by delivering customised test solution to the customers," it said.
Aemulus also noted that it is in the process of forming a joint venture (JV) with Tangren Microtelligence Technology Co Ltd as announced on April 10.
The JV, it said, is for a long-term business partnership in China that involves certain product technology transfer, R&D, manufacturing, sales and marketing.
"The board believes that the JV will improve the group's financial performance. The group estimates a gain of approximately RM3.4 million to be recognised from the transfer of intellectual properties to the JV. The gain would be recognised proportionately in the corresponding financial year upon the transfer of technology to the JV," it added.
Shares in Aemulus settled 1.5 sen or 2.38% lower at 61.5 sen apiece with 32.36 million units done. This gave the counter a market capitalisation of RM337.93 million.