Genetec plans RM154.8 mil private placement to fund expansion, working capital

KUALA LUMPUR (Jan 12): ACE Market-listed Genetec Technology Bhd has proposed to undertake a private placement of up to 10% of the company’s total share base to raise as much as RM154.8 million to fund the expansion of its manufacturing facilities and working capital requirements.

The placement exercise is to entail the issuance of up to 71.67 million shares to be placed out to independent third-party investors to be determined later, at an issue price to be fixed later, according to the industrial automation house’s Bursa Malaysia filing on Thursday (Jan 12).

Genetec has a total share base of 681.96 million shares, as well as 34.73 million outstanding options granted to the company's employees’ share option scheme, which remained unexercised as at Dec 30, 2022.

For illustrative purposes, based on an indicative issue price of RM2.16 apiece — 10% discount to the volume-weighted average price (VWAP) up to and including Jan 11 of RM2.40 — and a maximum placement size of 71.67 million shares, the cash call is expected to raise RM154.8 million.

Of the proceeds, Genetec has earmarked RM94 million towards the expansion of manufacturing facilities, ring-fenced another RM57.8 million for working capital requirements, while the remaining RM3 million is allocated to defray the estimated expenses related to the private placement.

Elaborating on the allocation towards its expansion plans, the company said RM47.7 million is to be utilised for the acquisition of a 683,293 sq ft piece of land together with buildings — consisting of a production-cum-office building, warehouse, ancillary buildings, carpark shed and an open car park area.

Meanwhile, RM46.3 million will be used for the construction of a new factory building, refurbishment and renovation, as well as the purchase of machinery and other ancillary equipment.

Genetec noted that the private placement is subject to Bursa Securities’ approval, and expects to submit its application to the bourse regulator within two months' time.

“Barring any unforeseen circumstances and subject to all the approvals/consents being obtained, the proposed private placement is expected to be completed by [the] first half of 2023,” it added.

Shares in Genetec closed five sen or 2.1% higher at RM2.43, giving the company a market capitalisation of RM1.66 billion.