Kimlun proposes RM40m private placement to boost working capital

• The majority of these proceeds, RM30 million, has been earmarked for property development expenditure in Johor.

KUALA LUMPUR (Aug 5): Kimlun Corp Bhd (KL:KIMLUN) has proposed a private placement to raise up to RM40.64 million to raise funds to meet the company’s working capital needs. The proposal involves issuing up to 35.34 million new shares, about 10% of the company’s total issued shares. 

The Johor-based construction and property development firm said the issue price for the shares will be determined at a later date. The shares will be placed with independent third-party investors, who have yet to be identified.

Based on an estimated issue price of RM1.15 per unit—a 10% discount to the five-day volume-weighted average market price (VWAMP) of Kimlun shares of RM1.2774—the private placement could generate gross proceeds of up to RM40.64 million.

The majority of these proceeds, RM30 million, has been earmarked for property development expenditure in Johor. This includes funding for the Pinegate Residency Phase 1 project, which has a gross development value (GDV) of RM320 million. The company also plans to use the funds for its Arden Residence and Pinegate Residency Phase 2 projects, with estimated GDVs of RM800 million and RM330 million, respectively.

Another RM7 million will be allocated for staff costs, and RM3 million for marketing and general operating expenses, such as diesel, utilities, and office costs.

The private placement is expected to be completed by the third quarter of this year. RHB Investment Bank is the principal adviser and placement agent for the proposed placement.

In the first quarter ended March 31, 2025 (1QFY2025), Kimlun’s net profit jumped to RM25.2 million from RM537,000 a year ago, thanks to stronger contributions across its business segments. Revenue more than doubled to RM459.71 million in 1QFY2025, from RM205.06 million in 1QFY2024. As of end-March 2025, the company had cash and cash equivalents of RM45.69 million. But total borrowings stood at RM725.17 million, with RM481.77 million in short-term borrowings.

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