Aurelius plans 10% placement to raise RM75m, proposes to buy land for RM13.58m

• The group also set apart RM2 million for the installation of a solar photovoltaic system.

KUALA LUMPUR (Jan 16): Kulim-based industrial electronic products and semiconductor components manufacturer Aurelius Technologies Bhd has on Friday (Jan 13) proposed a 10% shares placement to raise about RM75 million.

The proceeds from the corporate exercise will be mainly used to partly repay bank loans and to purchase additional surface mount technology (SMT) lines.

The electronics manufacturing services (EMS) firm said in a bourse filing that the issue price per placement share has been assumed to be RM2.10, which represents a discount of approximately 1.7% to the five-day volume weighted average market price of the shares up to and including the latest practicable date (LPD) of RM2.1353 per share.

As at the LPD on Jan 9, the total share base is 358.18 million. With gross proceeds of about RM75.22 million, Aurelius has earmarked RM27.42 million for part repayment of bank facilities within three months.

As at Dec 31, 2022, the EMS provider has total bank facilities of around RM97.13 million.

“The part repayment of bank facilities of approximately RM27.4 million is expected to result in estimated finance cost savings of approximately RM1.63 million per annum based on the average effective interest rate or profit rate of 5.95%,” Aurelius said.

It will allocate another RM25 million for the purchase of three additional SMT lines and RM20 million for investment in a new manufacturing plant, both within 24 months.

“As at the LPD, the group’s total manufacturing floor space is 87.2% utilised,” Aurelius said.

The group also set apart RM2 million for the installation of a solar photovoltaic system and the remaining RM800,000 for estimated expenses on the proposed placement, which is expected to be completed in the first quarter of 2023.

For the financial year ended Jan 31, 2022 (FY2022), Aurelius recorded a 46% increase in profit after tax to RM22 million, up from RM15.1 million in FY2021. The group has secured an order book of approximately RM360 million as at Dec 12, 2022.

“The proposed placement is expected to contribute positively to the future earnings of the group arising from the finance cost savings and also when the other benefits arising from the use of proceeds are realised,” Aurelius said.

The group, however, acknowledged that there will be an immediate dilution in the earnings per share, as a result of the expanded share base upon completion of the proposed placement.

Maybank Investment Bank Bhd has been appointed as the principal adviser and sole placement agent to Aurelius for the proposed placement. Meanwhile, RHB Investment Bank Bhd has been appointed as co-lead manager for the proposed placement.

Buying industrial land from MMC Corp

In another bourse filling on the same day, Aurelius also announced that it has signed the acceptance of the letter of offer from Northern Technocity Sdn Bhd for the purchase of the latter’s vacant industrial land in Kulim High-Tech Park measuring about 301,874 sq ft for RM13.58 million.

It said the freehold industrial land that has land platform works and basic infrastructure installation is located approximately 6km from the existing operating factory of BCM Electronics Corp Sdn Bhd, a wholly-owned subsidiary of Aurelius.

The vendor, Northern Technocity, is a wholly-owned subsidiary of MMC Corp Bhd.

“The company intends to construct an additional manufacturing plant (P5) with an approximate gross floor area of 200,000 sq ft on the proposed land to carry out advanced electronics manufacturing, and outsourced semiconductor assembly and test (OSAT) activities.

The proposed land acquisition is expected to be completed by the fourth quarter of the financial year ending Jan 31, 2024 (FY2024).

The construction cost of P5 is estimated to be at around RM55 million and it is targeted to be operationally ready by the first quarter of FY2025.

Aurelius had earlier on Nov 1, 2022 entered into a two-year lease for a 46,320 sq ft plant, also in Kulim Hi-Tech Park for P4, which primarily functioned as a warehouse and to undertake light assembly activities.