CEO Morning Brief

K Seng Seng to Raise RM41 Mil From Private Placement to Fund Stake Buy, Working Capital

Publish date: Thu, 15 Jun 2023, 08:44 AM
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TheEdge CEO Morning Brief

KUALA LUMPUR (June 14): K Seng Seng Corp Bhd (KSSC) is seeking to raise up to RM41.47 million from a private placement to finance the acquisition of a majority stake in a precision machined parts manufacturer, and for working capital.

The placement entails the issuance of up to 34.56 million new shares, representing not more than 20% of the group's issued shares, to independent investors to be identified later, the group said in a bourse filing on Wednesday (June 14).

KSSC assumed the issue price of the new shares at RM1.20, a discount of 6% to the five-day volume weighted average market price of the group’s shares of RM1.277 on Tuesday.

Of the RM41.47 million gross proceeds, RM21.25 million will be allocated for working capital for payment of overheads, while another RM19.12 million will go towards funding the acquisition of a 51% stake in Metalmach Micro Technology Sdn Bhd.

KSSC, which had in February entered into a term with sheet with Metalmach's major shareholder Low Kim Yoong to buy the 51% stake, inked a follow-up agreement with Low on Wednesday to buy the stake for RM19.12 million.

Metalmech specialises in precision manufacturing of semiconductor moulds, tools and dies, precision parts, jigs and fixtures, carbide tooling and the design and assembly of automation machines.

According to KSSC, the acquisition is in line with the group’s objective of acquiring strategic stakes in companies involved in high-value added metal-related industries with potential for future growth.

“The proposed acquisition will expand KSSC Group’s scale of operations and facilitate KSSC Group’s presence into the semiconductor industry,” it added.

KSSC’s share price has been on an uptrend since November last year. The stock climbed from 65 sen at end-October to a high of RM1.65 in January. On Wednesday, it closed at RM1.27, valuing the group at RM165.29 million.

Source: TheEdge - 15 Jun 2023

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