MAIN Market-listed company HB Global Ltd has proposed to undertake a private placement of up to 154 million new ordinary shares or 20% of the existing issued shares in the company to fund expansion in its food business as well as to reduce bank borrowings.
According to the group, the placement shares will be issued based on a discount of not more than 20% to the volume-weighted average market price of its shares for the five market days (5D-VWAMP) immediately preceding the price-fixing date.
Based on the illustrative issue price of 15 sen per placement share, HB Global will raise gross proceeds of circa RM23.1 mil.
“We have earmarked more than 70% of the proceeds for the funding for future projects, mergers and acquisitions, investment in other complementary businesses or assets,” the company’s executive director Keh Chuan Yee pointed out.
“We expect the acquisition or investment to be within the food processing business segment, such as those relating to the processing, packaging and producing of variety ready-to-serve foods as these businesses are deemed beneficial and are complementary to the group’s existing businesses.”
Underpinned by its fundamental principle of providing affordable foods products with high qualities and unique favour, HB Global’s products cater to a wide variety of users – from hypermarkets to tourist markets, food stalls to typical residential houses.
Keh further noted that the proposed private placement exercise would also enable the group to raise additional funds without incurring interest costs compared to conventional bank borrowings.
“In addition, it provides the group with an expeditious fundraising alternative from the capital market as opposed to other forms of fundraising. This increases the size and strength of the company’s shareholders’ funds,” he added.
Aside from food business, HB Global through its recently incorporated subsidiary HB Infrastructures & Technologies Sdn Bhd provides services such as CME supply & installation, telco structure supply & installation and project management to clients who are mainly telecommunication service providers (ie Maxis Bhd).
At the close of yesterday (Feb 14) trading, HB Global was down 0.5 sen or 2.7% to 18 sen with 1.22 million shares traded, thus valuing the company at RM139 mil. – Feb 15, 2022
