Coraza plans placement to raise RM69.5 mil to enhance capabilities

KUALA LUMPUR (March 29): ACE Market-listed Coraza Integrated Technology Bhd has planned a private placement of up to 20% of its share base to raise an estimated RM69.54 million, mainly to fund the purchase of new machinery.

The placement will comprise the issuance of up to 85.85 million shares to independent third parties to be identified, at an issue price to be determined, according to the bourse filing of the precision machining and electromechanical assembly services provider, which is also a sheet metal fabricator.

The estimated amount to be raised is based on an indicative price of 81 sen apiece, which represents a discount of 9.5% to the five-day volume weighted average market price up to and including March 28 — being the last practicable date prior to the filing — of 89.53 sen per share.

The bulk of the proceeds, RM44.6 million, has been earmarked for the purchase of new machinery for the group to enhance its capabilities and expand its service offerings to cater for high-end products as well as extend services to existing and new customers.

Of the balance, RM14.08 million will be used as working capital, and RM9.86 million for the repayment of bank borrowings, while RM1 million has been ring-fenced to defray expenses related to the placement.

M&A Securities Sdn Bhd has been appointed as the principal adviser and placement agent for the private placement, which is expected to be completed by the fourth quarter of 2023.

The company also plans to establish a long-term incentive plan of up to 10% of its share base for its directors, employees and subsidiaries, comprising a share grant plan and employees’ share option scheme.

Shares in Coraza finished one sen or 1.14% lower at 86.5 sen on Wednesday, giving the company a market capitalisation of RM371.29 million. From its initial public offering (IPO) price of 28 sen on Jan 20, 2022, the stock has risen 208.93%.