Highlights:
add free Download App
premium Premium Account

Last Price Change Volume
Open: Day Range: Prev Close:


GRAND-FLO SOLUTION BERHAD (“GRAND-FLO” OR “COMPANY”) PROPOSED PRIVATE PLACEMENT OF UP TO 10% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF GRAND-FLO (“PROPOSED PRIVATE PLACEMENT”)

GRAND-FLO SOLUTION BERHAD

Type

Announcement
Subject
GRAND-FLO SOLUTION BERHAD (“GRAND-FLO” OR “COMPANY”)

PROPOSED PRIVATE PLACEMENT OF UP TO 10% OF THE ISSUED AND PAID-UP SHARE CAPITAL OF GRAND-FLO (“PROPOSED PRIVATE PLACEMENT”)

Contents :

1. INTRODUCTION

      On behalf of the Board of Directors (“Board”) of Grand-Flo, K & N Kenanga Bhd (“Kenanga”) is pleased to announce that the Company proposes to undertake a private placement of up to 10% of the issued and paid-up share capital of Grand-Flo (“Placement Shares”).


2. DETAILS OF THE PROPOSED PRIVATE PLACEMENT
      The details of the Proposed Private Placement are as follows:-

(a) Pricing Methodology
          The issue price of the Placement Shares (“Placement Price”) will be determined at a later stage upon obtaining the relevant approvals for the Proposed Private Placement (“Price Fixing Date”). The Placement Price shall be determined at a discount to be determined by the Board of Directors of Grand-Flo, if necessary, based on the five (5) days weighted average market price of Grand-Flo shares immediately preceding the Price Fixing Date.
          For illustrative purposes, the five (5) day weighted average market price of Grand-Flo’s shares up to 10 March 2006 is RM1.03.
(b) Placement Arrangement
          Grand-Flo intends to place the Placement Shares with third party investors to be identified. Grand-Flo will appoint Kenanga as its placement agent to procure the prospective placees for the Placement Shares. At this juncture, the placees have yet to be identified.
(c) Utilisation of Proceeds
          The estimated proceeds from the Proposed Private Placement of RM5,170,188, assuming the Placement Price of RM1.03 and 5,019,600 Placement Shares (10% of the existing issued and paid-up share capital of Grand-Flo) being issued will be utilised for working capital requirements of Grand-Flo and its subsidiary companies (“Grand-Flo Group”) and to defray the expenses for the Proposed Private Placement.
(d) Ranking of the Placement Shares
          The Placement Shares will, upon allotment and issue, rank pari passu in all respects with the existing shares of the Company, save and except that they will not be entitled to any dividends, rights, allotments and/or distributions, the entitlement date of which is prior to the date of allotment of the Placement Shares.


3. RATIONALE FOR THE PROPOSED PRIVATE PLACEMENT
    The Proposed Private Placement is expected to:-
      (i) enable Grand-Flo to tap the capital markets for funds, thus minimising the need to raise funds via bank borrowings; and
      (ii) enable Grand-Flo to raise additional working capital to finance its growing operations and will further strengthen the capital base of the Company.


4. FINANCIAL EFFECTS OF THE PROPOSED PRIVATE PLACEMENT

The financial effects of the Proposed Private Placement are as follows:-

(a) Share Capital
          The effects of the Proposed Private Placement on the issued and paid-up share capital of Grand-Flo are set out in Table 1.
(b) Earnings
          The Proposed Private Placement is expected to be completed by the third (3rd) quarter of the financial year ending 31 December 2006. As such, the Proposed Private Placement is not expected to have any material effect on the earnings of Grand-Flo for the current financial year.
          Nonetheless, the Proposed Private Placement is expected to contribute positively to Grand-Flo Group in the subsequent financial year ending 31 December 2007.
(c) Net Assets
          The financial effects of the Proposed Private Placement on the net assets of Grand-Flo based on the latest quarterly results for the financial year ended (‘FYE”) 31 December 2005 are set out in Table 2.
(d) Substantial Shareholders’ Shareholdings
          The effects of the Proposed Private Placement on the shareholdings of the substantial shareholders’ of the Company as at 28 February 2006 are set out in Table 3.
(e) Dividends
          The Company did not declare any dividend for the FYE 31 December 2005. Any declaration of future dividends will be dependent upon the retained profits, cashflow position and the funding requirements of the Company.


5. APPROVALS REQUIRED
      The Proposed Private Placement is subject to the approvals being obtained from the following:-

(a) the Securities Commission (“SC”) for the Proposed Private Placement;
      (b) Bursa Securities for the listing of and quotation for the Placement Shares on the MESDAQ Market of Bursa Securities; and

(c) any other relevant authorities.
      The shareholders of Grand-Flo authorizing the Directors of the Company to allot and issue new Grand-Flo shares not exceeding 10% of the total issued capital of the Company pursuant to Section 132D of the Companies Act, 1965 was obtained at the Annual General Meeting of the Company held on 16 June 2005.


6. DIRECTORS’ AND SUBSTANTIAL SHAREHOLDERS’ INTERESTS
      The Company intends to place the Placement Shares to third party investors to be identified. Hence, none of the Directors and/or substantial shareholders of the Company and/or persons connected to them have any direct and/or indirect interest in the Proposed Private Placement.

7. DIRECTORS’ RECOMMENDATION
      The Directors of Grand-Flo, having taken into consideration all aspects of the Proposed Private Placement, are of the opinion that the Proposed Private Placement is in the best interests of the Company.

8. APPLICATION TO THE RELEVANT AUTHORITIES
      Applications to the relevant authorities for the Proposed Private Placement are expected to be submitted within one (1) month from the date of this announcement.

9. ADVISER
      Kenanga has been appointed to act as the Adviser of the Company for the Proposed Private Placement.


This announcement is dated 15 March 2006.


Table.doc

Attachments

Table.doc
71 KB



Announcement Info

Company NameGRAND-FLO SOLUTION BERHAD (MESDAQ Market) 
Stock Name GRANFLO    
Date Announced15 Mar 2006  
CategoryGeneral Announcement
Reference NoO&-060315-61349



Close