KUALA LUMPUR: Kobay Technology Bhd is undertaking a private placement of up to 10 per cent of its issued shares to raise up to RM153.14 million, at an illustrative issue price of RM5.00 per share.
In an exchange filing today, Kobay said the gross proceeds are expected to be utilised to set up new aluminium products manufacturing plant (RM60 million), partial repayment of bank borrowings (RM50 million) and working capital for the group's manufacturing division (of up to RM42.7 million).
As of October 29, 2021, Kobay had an issued share capital of RM102.10 million, comprising 306.28 million Kobay shares.
The company had planned to expand into manufacturing aluminium products such as aluminium frames for solar panels for renewable energy-related businesses by setting up new aluminium products manufacturing plants for the said business expansion.
"The private placement is the most appropriate avenue for the company to raise funds, allowing the company to raise the requisite funds without having to incur additional interest expense or principal service repayments as opposed to bank borrowings."
This in turn, allows the company to preserve its cash flow while raising funds expeditiously and cost-effectively.
The exercise also would strengthen the company's financial position and capital base and potentially enhance the liquidity of Kobay shares.
Kobay is principally involved in manufacturing precision machined components, precision stamping, sheet metal parts, surface treatment, precision moulds, tooling and dies, semiconductor assembly, and testing equipment.