Magma said the private placement is the most appropriate fundraising route for the group, adding that the exercise is expected to strengthen its financial position while supporting ongoing business plans and capital expenditure.
KUALA LUMPUR (Dec 5): Magma Group Bhd (KL:MAGMA) has proposed a private placement of up to 168.11 million new shares, representing up to 10% of its issued share capital, to raise up to RM50.1 million to fund property development works and investments in its hotel division.
The placement will be undertaken in one or more tranches, with the issue price to be determined later, the group said in a filing with Bursa Malaysia.
For illustration, Magma assumed an issue price of 29.8 sen per share, a 9.97% discount to its five-day volume-weighted average price of 33.1 sen as at Nov 14.
Of the RM50.1 million in gross proceeds, RM32 million will be allocated for property development costs in Persiaran Dutamas, Kuala Lumpur—covering contractor payments, consultancy fees, preliminaries and marketing expenses.
Another RM15 million has been earmarked for development and upgrades within Magma’s hotel segment, while RM2 million will go towards working capital and RM1.1 million towards expenses related to the placement exercise.
Based on Magma’s audited results for the financial year ended Dec 31, 2024, the group’s working capital requirement stood at RM36.72 million. Inventories and trade receivables amounted to RM47.85 million and RM6.41 million respectively, making up 55.95% and 7.50% of total current assets.
As at Nov 14, the group held RM11.26 million in cash and bank balances.
Magma said the private placement is the most appropriate fundraising route for the group, adding that the exercise is expected to strengthen its financial position while supporting ongoing business plans and capital expenditure.
“Nonetheless, the board continues to look for opportunities present in the market to enhance Magma’s revenue and profitability to meet its cash flow requirements in the medium to long term,” it added.
Magma, formerly known as Impiana Hotels Bhd, has been loss-making since 2020. The group widened its net loss to RM41.2 million for the third quarter ended Sept 30, 2025 (3QFY2025) compared to RM2.89 million in the same period a year earlier, as quarterly revenue tumbled 88.31% year-on-year to RM969,000.
Shares of Magma closed up half a sen or 1.49% to 34 sen on Friday, valuing the group at RM571.57 million. The counter has risen over 54% since the start of this year.
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Source: EdgeProp.my
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