“Jiankun International Bhd plans a private share placement to raise up to RM3.86 million, mainly for working capital, targeting completion by 1Q2025.”
Kuala Lumpur, 12th Aug 2024, 11.31am – Loss-making property developer Jiankun International Bhd plans to raise up to RM3.86 million through a private share placement, with the issue price to be determined later.
The funds will primarily be allocated for working capital, including staff salaries, and the remainder will cover operating and administrative expenses such as utilities, rent, transportation, and office maintenance.
Earlier this year, the group raised RM19 million in March, which was fully utilized for the partial payment of land acquisition in Klebang, Melaka, intended for a commercial development that will include retail spaces, serviced apartments, and office units.
Jiankun International Bhd stated in a filing with Bursa Malaysia on Friday that the proposed development is expected to begin in the first quarter of 2025 (1Q2025), pending approval from the relevant authorities.
The group also noted that as of Thursday, its cash and bank balances totaled RM270,000. For the 15-month period ending March 31, 2024, Jiankun incurred RM10.52 million in administrative expenses for its operations, equating to approximately RM700,000 per month or RM8.42 million annually.
The company added that the proposed private placement will allow them to raise funds without incurring additional interest expenses, helping to reduce cash flow commitments and preserve the group’s liquidity.
Under the proposed exercise, up to 55.2 million new shares will be issued. This estimate takes into account that it’s unlikely all outstanding Warrants B as of Aug 8 will be converted into new shares before the completion of the private placement, given that Warrants B are currently out-of-the-money. The five-day volume-weighted average price (VWAP) of the shares up to Aug 8 was 7.48 sen, compared to the exercise price of Warrants B at 12 sen.
As of Thursday, the group’s issued share capital was RM104.64 million, consisting of 496.81 million shares.
At an illustrative issue price of seven sen per placement share, which represents a 6.42% discount to the five-day volume-weighted average price (VWAP) of Jiankun shares at 7.48 sen, the proposed private placement is expected to raise between RM3.48 million and RM3.86 million.
Barring any unforeseen circumstances, the proposed private placement is anticipated to be completed by the first quarter of 2025. TA Securities Holdings Bhd is acting as the principal adviser and placement agent for the exercise.
Jiankun shares remained unchanged at 6.5 sen on Friday, giving the group a market capitalization of RM32.29 million. The share price has declined by 45.83% so far this year.
