KUALA LUMPUR (Sept 18): Priceworth International Bhd has proposed a private placement to raise up to RM15.52 million for working capital and to fund its timber reforestation activities.

Notably, the group had embarked on three rounds of private placement for the past three consecutive years, raising RM9.22 million in 2020, RM2.05 million in 2021 as well as RM13.64 million in 2022-2023 (RM9.1 million in Aug 2022 and RM4.54 million in Jan this year).

On top of that, the group has raised RM100 million via the issuance of its 2% redeemable convertible notes, due in 2024. The proceeds raised from the issuance of the notes were earmarked for infrastructure costs for timber logging and repayment of bank borrowings.

In a filing with Bursa Malaysia, Priceworth said the latest private placement will involve up to 149.51 million new shares or 10% of its total number of issued shares at an issue price to be determined and announced later.

However, the group had issued an aggregate of 40.95 million shares to third party investors under the general mandate during the preceding 12 months up to the latest practicable date (LPD) of Aug 23, 2023.

Accordingly, a total of up to 108.56 million placement shares may be issued by the group as at the LPD, after taking into consideration the total shares issued pursuant to the private placement proposed in July last year.

“For illustrative purposes, the illustrative issue price of the placement shares is assumed at RM0.1430 per placement share (indicative issue price), which represents a discount of approximately 9.61% to the five-day VWAP (five-day volume weighted average market price) of Priceworth shares up to and including the LPD of RM0.1582 per share,” said the group.

From total proceeds of RM15.52 million, the bulk or RM10.46 million has been earmarked for working capital and another RM5 million will be used for timber reforestation.

The proposals are expected to be completed in the first quarter of 2024.

In terms of financial performance, the group posted a cumulative net loss of RM9.76 million in the first half of this year ended June 30, 2023 (1HFY2023), against a cumulative net profit of RM17.96 million in 1HFY2022.

Revenue fell 82.7% to RM14.28 million in 1HFY2023, from RM82.65 million previously, on weaker timber demand including in its key market Japan.

Shares in Priceworth International fell 2.5 sen or 15.15% to 14 sen, giving the group a market capitalisation of RM209 million.