Green Packet places up to 40% of its issued shares to raise RM 43 million for cloud computing biz

KUALA LUMPUR (Dec 17): Green Packet Bhd plans to issue up to 40% of its issued shares to raise a whopping RM 42.99 million to fund its cloud computing solutions. It is the group’s third placement in less than a year and a half.

The latest proposed placement includes the issuance of up to 716.41 million shares to identifiable third-party investors, the technology, media and telecommunications player said in a filing with Bursa Malaysia on Friday (Dec. 17).

While the issue price for the placement shares has yet to be determined, the expected yield to increase is based on an indicative price of 6 sen per placement share, which is a discount of approximately 18.48% from the five-day volume-weighted average price of Green Packet shares. shares until December 16 from 7.36 sn.

Green Packet said the placement shares will be priced immediately prior to the pricing date at a discount of no more than 20% of the shares’ 5D-VWAP.

It expects to allocate RM 20 million from the maximum proceeds to partially fund the construction of a hyperscale data center that will provide space for cloud service providers to house their servers or infrastructure, with the remainder of the proceeds being used as working capital for the cloud. computing activities and the purchase of hardware/equipment.

The group has identified a leasehold plot in the southern region of Malaysia to build the HDC and has entered into preliminary negotiations with the landowner. Subject to the success of the negotiations and subsequent approval of the development contract, as well as the construction plans of the relevant authorities, the group plans to start construction in the 2nd half of 2022.

The total estimated cost for the HDC is RM410 million and is expected to be completed within two years. The group plans to fund the balance of its capital expenditure at a later stage through a combination of debt and/or equity fundraising, Green Packet said.

The group already did two previous internships this year. The first, proposed on August 12, 2020, was completed on March 29 of this year, yielding a return of RM 51.6 million – the majority for working capital, of which about 24% was used for its cloud computing business.

The second — proposed in July this year after Green Packet called off its planned three-for-five rights offering to raise RM 328.37 million, citing prevailing market conditions and volatile stock price — was announced just two months ago at 13. completed in October, raising RM 20.98 million that it used primarily for working capital.

Shares of Green Packet fell half a sen or 6.25%, closing at 7.5 sen Friday, translating into a market cap of RM105.24 million. The counter has fallen by 82% so far.

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