BUSINESS

RUBBEREX PROPOSES RM78 MLN PRIVATE PLACEMENT TO RAISE FUND FOR PLANT

21/06/2021 09:56 PM

KUALA LUMPUR, June 21 -- Rubberex Corporation (M) Bhd has proposed to undertake a private placement of its shares to raise about RM78 million for its new nitrile disposable glove production plant in Perak.

The rubber glove manufacturer said the proposed private placement would entail the issuance of up to 83.23 million new shares, representing approximately 10 per cent of its existing issued shares, at an issue price to be determined later.

“For illustrative purposes, assuming the placement shares are issued at an indicative issue price of 94.5 sen per placement share, the proposed private placement will raise gross proceeds of approximately RM78.65 million,” it said in a filing with Bursa Malaysia today.

Of the total proceeds, Rubberex said up to RM69 million would be used to partly finance the acquisition, installation and commissioning of 28 production lines.

About RM9 million of the proceeds would be utilised for the working capital requirements of its day-to-day operations, and the remaining RM520,000 would be used for estimated expenses, such as fees payable to the relevant authorities, as well as advisory and placement fees, it said.

On Jan 22, 2021, Rubberex completed the acquisition of two parcels of leasehold land measuring about 4.82 hectares in Lahat, Perak for the construction of its third nitrile disposable glove production plant, which would be able to house up to 28 “double-formers” production lines.  

Although the construction of the new plant has yet to commence, the company said it intended to commission all the production lines in stages over the next 24 months, with the first 14 double-formers lines expected to be commissioned by the first half of 2022 (1H22) and the remaining 14 by 2H22.

The new plant is expected to increase the group’s glove production capacity by an additional 7.5 billion to 10.0 billion pieces annually, from the current capacity of 2.5 billion pieces per annum.

“The board is optimistic that the overall business growth of the group will remain strong due to positive prospects for the glove industry,” it said.

-- BERNAMA


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