KUALA LUMPUR (July 17): Plastic mold injection outfit Ge-Shen Corp Bhd has proposed to undertake a private placement of 10% of its issued share capital to raise up to RM15.35 million.

In a filing to Bursa Malaysia on Monday (July 17), the company said the private placement entails the issuance of up to 11.8 million new shares.

As of July 14, Ge-Shen has an issued share capital comprising 110.5 million shares.

The group said the actual number of placement shares to be issued and its respective issue price will be determined at a later date.

The exercise will not be placed for an interested director, major shareholder or chief executive of Ge-Shen or a holding company of the company, a person connected with an interested person and nominee corporations.

For illustrative purposes, the indicative issue price for the exercise is assumed to be RM1.30, which represents a discount of approximately 9.42% to the five-day volume weighted average price (VWAP) of Ge-Shen shares based on the latest share price of RM1.4352 per share.

Proceeds from the exercise will be allocated for procurement of raw materials or payment to suppliers, utilities and staff-related costs, as well as general administrative expenses.

On the rationale of the exercise, Ge-Shen pointed out it will enable the group to raise funds more expeditiously and in a cost-effective manner as opposed to other fund-raising options. The corporate exercise could also improve the liquidity and strengthen its financial position and shareholders’ value.

Ge-Shen, which went through a boardroom change in June, had appointed Keh Chuan Seng as executive chairman after the low profile-businessman acquired a 27.91% stake in the company.

Keh is also the executive chairman of hardware company K Seng Seng Corp Bhd, executive chairman of telecommunications and food manufacturing company HB Global Ltd, and also executive chairman of renewable energy player Tex Cycle Technology (M) Bhd.

Similarly, Keh has substantial shareholdings in all these companies — 26.53% in K Seng Seng, 26.44% in Tex Cycle Technology and 16.65% in HB Global. While his shareholding in HB Global is a direct stake, in the other companies his shares are held via his privately held Frazel Group Sdn Bhd, which means there is no cross-shareholding in the four companies.

Ge-Shen shares closed a sen lower or 0.69% to RM1.44, valuing the group at RM159.3 million.