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Ho Wah plans private placement to raise up to RM4m for debt repayment and working capital

HO WAH Genting Bhd (HWGB) has proposed a private placement of up to 20.55 million new shares, representing 10% of its issued share capital, to raise an estimated RM4.01 million in proceeds. The placement price will be determined later, based on a discount not exceeding 10% to the five-day volume-weighted average market price prior to price fixing. According to HWGB, the bulk of the proceeds, around RM3.15 million, will be used to partially repay its borrowings, specifically a bridging loan from Advance Opportunity Funds and Advance Opportunity Funds 1, which the group expects will yield gross interest savings of approximately RM130,000 per month. The remainder will go toward payment to creditors, working capital, and placement-related expenses. The board said the private placement is the most cost-effective and expedient way to raise funds compared to other options like a rights issue, especially given the uncertain economic climate. It also noted that the placement would strengthen HWGB's capital base without adding new interest-bearing debt. The group acknowledged the challenges facing its power cord division due to high operating costs, intense market competition, and global uncertainties, but it plans to focus on process efficiency and quality improvements to remain competitive. Additionally, HWGB sees growth potential in its healthcare segment, as consumers increasingly prioritise health, wellness, and personal care products. The private placement is subject to approval from Bursa Malaysia Securities and is expected to be completed in the second half of 2025. — TMR