KUALA LUMPUR (June 27): MyNews Holdings Bhd has proposed a placement to raise RM29.33 million, with 78% of the proceeds to be used to fund working capital.

In a filing with Bursa Malaysia, the loss-making convenience retail chain store said the proposed placement would involve an issuance of up to 68.2 million new shares — representing not more than 10% of the total number of issued shares — to third-party investors to be identified and at an issue price to be determined later.

For illustrative purposes, assuming an issue price is 43 sen per share — representing a discount of approximately 7.41% to the five-day volume weighted average market price up to the latest practicable date (May 31) of 46.44 sen — the group could raise gross proceeds of up to RM29.33 million.

Out of the RM29.33 million, RM22.88 million will be allocated for working capital as the group plans to open up 48 convenience stores in Malaysia within the next 12 months.

MyNews said it is unable to ascertain the location of each new outlet at this juncture, as it is in the midst of identifying suitable geographical locations.

Meanwhile, RM6.32 million will be used for working capital which includes payment to trade creditors, as well as sales and marketing expenses, while the remaining RM130,000 is for defraying estimated expenses relating to the proposed placement.

The proposed placement is expected to be completed by the third quarter of this year.

MyNews performed better with a net loss of RM6.28 million in the first quarter ended March 31, 2023 (1QFY2023), from RM10.22 million a year earlier, as revenue increased to RM174.2 million from RM141.1 million.

As at end-March, MyNews’ total borrowings were RM89.3 million against cash and bank balances of RM14.39 million.

MyNews finished 3.3% or 1.5 sen lower at 44 sen on Tuesday (June 27), giving it a market capitalisation of RM300.15 million. Its share price has fallen over 30% since the beginning of this year.