KUALA LUMPUR (May 13): Home appliances company Fiamma Holdings Bhd (KL:FIAMMA) said on Monday it is proposing a private share sale that is expected to raise up to RM56.25 million from investors to be identified later.

The proposed placement involves up to 10% of its issued share, or 53.06 million new shares, to investors to be identified later, Fiamma said in an exchange filing. The company has already secured a mandate from shareholders during an annual general meeting last year, it noted.

“The proposed private placement will strengthen the capital position of Fiamma” and allow the company to raise the necessary funds, Fiamma said. The actual proceeds to be raised will depend on the issue price and the number of shares to be issued, which will be determined later.  

Fiamma has earmarked RM30 million to grow its trading-and-services segment by expanding its product range, financing the purchase of electrical home appliances for trading, and for marketing and promotions.

“The electrical household appliances market is highly competitive, with numerous brands vying for market share,” Fiamma said. “To remain competitive, players must be innovative, customer-focused and agile.”

The company will also set aside RM15 million for capital expenditure, including for office renovation and installation of solar panels. Further, the company allocated RM9.7 million to RM9.75 million as working capital, and the remaining RM1.5 million to defray placement expenses.

Fiamma will apply to Bursa Malaysia within the next two months, and the proposed placement is expected to be completed by the second half of 2024, it noted.

M&A Securities has been appointed as the adviser and the placement agent.

Kitchen cabinet maker Signature International Bhd (KL:SIGN) is the single-largest shareholder of Fiamma with a 22.63% stake.  Shares in Fiamma ended unchanged at RM1.19 on Monday, ahead of the announcement, and have gained nearly 27% so far this year.