UMS Integration proposes up to RM450mil private placement to fund regional expansion

KUALA LUMPUR: UMS Integration Ltd raising up to RM450 million through a private placement of a maximum 52.9 million shares, at RM8.50 apiece.

The proposed placement shares will be offered strictly in Malaysia pursuant to Schedule 6 and Schedule 7 of the Capital Markets and Services Act 2007, and will not be offered in Singapore, the group said in a Bursa Malaysia filing.

The placement price of RM8.50 per share represents a discount of 0.23 per cent to the volume weighted average price (VWAP) of S$2.666 for trades on the Singapore Exchange and 1.11 per cent to the VWAP of RM8.595 on Bursa Malaysia as of Sept 28.

The placement shares represent approximately 5.96 per cent of the company's existing issued and paid-up share capital of 888.17 million shares, and approximately 5.63 per cent of the enlarged share capital of 941.11 million shares.

Estimated net proceeds from the exercise stand at RM443.0 million (about S$138.64 million) after deducting estimated fees and expenses of RM7.0 million.

The group intends to deploy the proceeds across its regional operations, particularly projects in Penang (RM332.25 million or 75 per cent of total) and for those in Vietnam and Singapore

UMS plans to expand manufacturing capabilities at its Penang Science North Park facility by integrating advanced automation, robotics, and digital monitoring systems to address manpower constraints and elevate production efficiency.

The proceeds will also be used to support its expansion through the acquisition or lease of a new factory, establishing a new manufacturing line, and acquiring machinery in Vietnam.

In Singapore, the funds will be directed toward purchasing automated machinery to optimize operations.

Bank Negara Malaysia had approved for the issuance of ringgit securities by a non-resident on Sept 1 under specific conditions, including a minimum of 75 per cent of net proceeds must be utilised for operations and projects in Malaysia.

The central bank also restricted ringgit conversions for projects outside Malaysia must be executed on a staggered basis not exceeding US$15 million per day.

Prior approval from Bank Negara is also required for any subsequent ringgit securities offerings on Bursa Malaysia, the group said in the filing.