Cyberjaya, 28 July 2020 – Dagang NeXchange Berhad (“DNeX”) has proposed to undertake a private placement of up to 20 per cent of its total issued shares to third party investors to be identified later.
Based on the indicative issue price of RM0.22 per placement share and assuming the Group’s outstanding convertible securities are fully exercised prior to implementation of the proposed private placement, DNeX is expected to raise gross proceeds of up to RM109.14 million from the corporate exercise as it looks to fund its next growth phase.
The Group intends to utilise the gross proceeds to mainly finance suitable and viable potential growth opportunities which in turn can generate positive returns moving forward. In addition, the gross proceeds will also be used as partial repayment of bank borrowings, working capital, and for expenses associated with the exercise.
According to Encik Mohd Azhar Mohd Yusof, Acting Group Managing Director of DNeX, such growth opportunities include investments that will expand and complement the company’s focus on its core business.
“We believe there are sound opportunities where we can tap to put us back on the growth path. Especially under current market conditions, valuations of certain IT and Energy assets have become attractive for the Group to consider investing in. However, we will be very selective and prudent in making investment decisions so as to ensure the preservation and growth of shareholder value,” he said.
“The corporate exercise will build up the Group’s war chest and strengthen our capabilities to develop new sustainable revenue lines as part of our plan to chart the next growth phase for the Group,” he added.
He said the Group aims to ramp up efforts to participate in digitalisation transformation initiatives in the country and the region. In its Energy segment, DNeX is also focused on providing technology-based and digital solutions to its customers.
At the same time, DNeX will continue its efforts to optimise costs to drive operational efficiency and earnings sustainability; revitalise its vision, mission and values to build a performance-based culture that leads to value creation for all shareholders; as well as strengthen internal controls, he added.
DNeX views the proposed private placement as the most appropriate avenue of fund raising as it enables the Group to raise additional funds without incurring interest costs as compared to conventional bank borrowings. In addition, the exercise is also a way for the Group to increase the size and strength of its shareholders' funds.
The proposed private placement is expected to be completed by the fourth quarter of 2020 pending approvals from Bursa Securities, for the listing and quotation for the placement shares on the Main Market of Bursa Securities, and any other relevant authority. The Company had obtained the approval from its shareholders at the last Annual General Meeting convened on 29 June 2020.
As at 15 July 2020 or latest practicable date (“LPD”) prior to announcement of the exercise, the total issued share capital of DNeX was RM354,339,587 comprising 1,758,090,478 DNeX shares.
The placement shares will be issued at a price of not more than 10 per cent to the five-day volume weighted average market price (“VVAP”) of DNeX shares immediately preceding the price-fixing date.
The indicative issue price of RM0.220 per placement share represents a discount of about 9.47 per cent to the five-day VWAP of DNeX shares up to and including the LPD of RM0.243 per DNeX share.