By Xavier Kong
Local poultry player Lay Hong Bhd has had its trading suspended from 2.48pm, Jan 8, pending an announcement from the group.
This may be an announcement to do with the group’s proposal for a private placement of up to 10%, which the group had submitted to Bursa on Dec 15, 2015. The shares are intended for third-party independent investors, with the group looking to raise up to RM34.23 million from the exercise, which is expected to be concluded by the end of the first quarter of the 2016 calendar year.
In the announcement to Bursa, Lay Hong had indicated that they will be utilising RM200,000 from the total to pay for the expenses of this exercise, with the remainder to be used as working capital which will be used within 12 months from the completion of the exercise. The working capital, in this case, is expected to be used to purchase raw materials, as well as make payments to creditors.
The board of Lay Hong rationalised the option as an expeditious means of acquiring working capital, without incurring interest costs from bank borrowings. The board also expects the exercise to reduce the group’s gearing from the 1.07 times as of March 31, 2015, to between 0.66 times to 0.85 times after the exercise.
As of 4.20pm, Lay Hong shares were last traded at RM6.75, up 25 sen.
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