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KUALA LUMPUR (June 29): Avillion Bhd has proposed a private placement exercise to raise funds for the repayment of bank borrowings, refurbishment and maintenance of hotels and resort as well as for a property development project.
Based on an illustrative issue price of 15.5 sen per share, it expects to raise gross proceeds of up to RM13.31 million.
Of this, RM6 million is allocated for the repayment of bank borrowings, RM4 million for the refurbishment and maintenance of its hotels and resort, while RM2.17 million is earmarked for a property development project.
The balance of the proceeds will be used for working capital purposes and to cover estimated expenses in relation to the exercise.
“The proposed placement will enable the company to raise the requisite funds to partially repay the group’s bank borrowings which stood at RM102.25 million as at May 31, 2019, as well as to fund the refurbishment and maintenance costs of the group’s hotels and resort, the development costs of the Desa Impian project and the working capital requirements of the group,” it said.
The repayment of bank borrowings is expected to result in an annual gross interest savings of approximately RM440,000 based on the average cost of borrowings of approximately 7.33% per annum for FY19, said Avillion.
Meanwhile, the funds allocated for its hotels and resort will enable the group to enhance its assets in Port Dickson, given the emergence of newer hotels and resorts within the vicinity.
The group expects to complete the proposed placement in the third quarter of 2019, barring unforeseen circumstances.
Avillion’s share price fell 0.5 sen or 3.13% to 15.5 sen, giving it a market capitalisation of RM133.08 million.
