Tek Seng to fund output capacity growth through private placement

KUALA LUMPUR: Tek Seng Holdings Bhd plans to raise up to RM37.08mil through a proposed private placement exercise to third party investors. 

The maker of PVC floorings and solar cells told Bursa Malaysia that it proposed to issue up to 36 million shares, or 10% of its enlarged paid-up capital following the exercise of warrants, for an indicative price of RM1.03 -- a 9.65% discount to its shares’ five-day weighted average market price up to Friday.

Tek Seng shares fell 1 sen to close at RM1.07 on Friday, with 955,300 shares traded.

Tek Seng expected the proposed placement to raise gross proceeds of between RM27.81mil and RM37.08mil, of which it would allocate RM16.06mil to RM21.08mil for capital expenditure (capex) and RM6mil to RM8mil for working capital requirement. A total of RM5mil to RM7mil will be used to repay bank borrowings.   

Of the amount set aside for capex, the company plans to use RM9.06mil to part-finance the construction of a three-storey photovoltaic product manufacturing plant costing RM46mil in Bukit Minyak Science Park, Penang.

The rest will be used to buy two solar cell turnkey line machineries with a combined 140 MW production capacity to generate 32 million units of solar cells annually.

Tek Seng currently has four production lines for solar cell products, and it aims to add five more lines to boost its capacity to 280 MW.

The company targets to complete the proposed private placement this quarter.