Hubline proposes private placement to raise RM23m

PETALING JAYA: Shipping group Hubline Bhd has proposed to undertake a private placement exercise to raise up to RM23.02 million.
The group said in a Bursa Malaysia filing that it will be allotting between 47.78%-51.23% of the proceeds raised to repay its bank borrowings, amounting to RM113.85 million, which will be deployed within a year.
About 25.63%-27.48% of the proceeds will be allotted for capital expenditure while 16.94%-18.16% will be used to partially pay the outstanding payment owed to creditors in relation to its container shipping business.
The remaining will be used as working capital and to finance expenses stemming from the private placement exercise.
Hubline also has about RM22.22 million remaining from its previous redeemable convertible notes (RCN) exercise from which it raised RM80 million.
"The proceeds raised from the RCN have been set aside to repay the group’s borrowings, which are mainly related to the container shipping business (RM17.53 million) and to finance the acquisition of two new barges for its dry-bulk business (RM4.69 million)," said Hubline.
In addition to the funds raised from the RCN, the board has decided to raise additional funds through the exercise to further reduce the group’s existing borrowings, to expand its dry-bulk business and to settle amounts owing to creditors related to the group’s container shipping business," it added.
The group has already obtained the approval of its shareholders for the exercise, which will be conducted in multiple tranches in the course of six months.
The proposed private placement is expected to contribute positively to the earnings of the Hubline Group for the financial year ending Sept 30, 2018 as and when the benefits from the utilisation of proceeds are realised.
Hubline's shares closed 4.76% lower at 10 sen with some 40.66 million shares done.