Yongnam Holdings is looking to raise $7.94 million through the proposed placement of 104.52 million new ordinary shares in the capital of the company, at an issue price of 7.6 cents per share.

The issue price represents a discount of approximately 9.85% to the volume weighted average price (VWAP) for trades done on April 12.

The placement agreement was entered into with W Capital Markets on April 13.

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Assuming all the placement shares are placed out, the company’s issued share capital will increase to 627.12 million shares from 522.60 million shares. The new shares will represent 16.7% of the enlarged share capital.

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The proposed placement will not result in a transfer of controlling interest.

The net proceeds from the placement are estimated to be $7.5 million, which the company says will be utilised in its entirety for working capital purposes.

Shares in Yongnam closed at 8.3 cents per share on April 12.