Bioalpha Holdings Berhad (“Bioalpha” or “the Company” or “the Group”), an integrated health supplement company, has today announced a proposed private placement exercise, entailing the issuance of up to 109.9 million new ordinary shares (“Placement Shares”) in Bioalpha (“Proposed Private Placement”), representing up to 10 percent of Bioalpha’s enlarged number of issued shares.
The 109.9 million Placement Shares will be issued to third-party investors at an issue price that shall be determined and announced at a later date. Assuming full subscription of the Placement Shares at an indicative issue price of 12.9 sen per Placement Share, the Proposed Private Placement exercise is expected to raise gross proceeds of up to approximately RM14.2 million.
Of the RM14.2 million potential proceeds, Bioalpha has allocated up to RM14.1 million to explore growth opportunities, including the investment and expansion of the Group’s existing business, and complementary businesses to improve the digitalization of the business. Meanwhile, the balance of fund raised of RM0.1 million will be allocated for the expenses related to the Proposed Private Placement.
Managing Director of Bioalpha, William Hon said, “The additional capital injection from the proposed exercise fortifies our financial position and provide us the additional capacity to execute the Group’s growth strategies. We have always been on the lookout for M&A opportunities which are earnings-accretive and complementary to our business. Given the current economic environment, this is an opportune time to explore these M&A prospects, driven by the availability of quality targets at a more attractive valuation compared to previously.”
“We are looking at expanding our existing business and companies that can contribute towards our goal of enhancing the Group’s e-commerce capabilities. The Novel Coronavirus (“Covid-19”) pandemic has accelerated the adoption of e-commerce worldwide and we aim to capture the upward trend of online shopping among consumers to market our range of products. Our efforts are focused on strengthening our digitalization efforts of the Group’s sales channel, in line with our intent to increase our revenue stream from online platforms. At the moment, our health supplement products are available on various popular e-commerce sites such as Lazada and Shopee, among others. We also have an online presence for our eConstant shop at www.constant.com.my, with delivery services provided.”
“With the funds raised from the Proposed Private Placement, we are in an even stronger position to carry out our expansion plans. As at 31 December 2019, we are in a net cash position. This allows us to actively seek new investment opportunities with the aim of enhancing the long-term growth of the Group and the value we deliver to our shareholders.”
“As we scale our business, we believe that the Proposed Private Placement is the most appropriate and expeditious avenue of fundraising without having to incur interest expense. It also enables us to strengthen our equity base. As for placees, we are targeting strategic investors, either local or foreign, who could help add value and accelerate our growth path,” said Hon.