HLT Global plans to raise up to RM77m via private placement
11 Jan 2022
HLT Global Bhd has proposed a private placement of between RM66.50 million and RM76.84 million to fund its rubber glove business expansion and for working capital requirement.
The group had in August 2020 proposed a private placement of up to RM325 million for the same purpose, but the proposal lapsed after the group failed to implement the fund raising within one year.
In a filing with Bursa Malaysia, HLT said the new proposal entails the issuance of between 141.48 million and 63.49 million new shares to third party investors.
HLT had 707.39 million issued shares as at Dec 31, 2021. In addition, it had 98.09 million outstanding warrants expiring in 2022, as well as 11.96 million immediately exercisable options under the employees share option scheme.
The company said that for illustration purpose, the issue price of the placement units is assumed at 47 sen each, which represents a discount of 9.41% to the five-day volume weighted average market price of 51.88 sen.
HLT said it intends to use between RM49 million and RM57.5 million of the placement proceeds to part-finance its factory construction in relation to the rubber glove manufacturing business expansion.
The new glove-dipping plant located at Semenyih has a total construction cost of RM50 million. Meanwhile, the fabrication, installation and commissioning of four or five new double-former glove-dipping lines is estimated to cost RM8.5 million per line.
As a result, upon full commissioning of the new lines, the group’s production lines will increase to 20 or 21, with production capacity more than doubling to between 2.24 billion and 2.55 billion pieces per year, from the current 1 billion pieces.
Meanwhile, it has earmarked between RM16.10 million and RM17.74 million to fund its working capital requirements which include operating expenses, payment for staff salaries and trade creditors.
The board expects the private placement to be completed within six month from the date of Bursa Securities’ approval.
HLT’s shares price fell three sen or 5.77% to close at 49 sen on Tuesday (Jan 11), valuing the company at RM347 million. Since touching a high of RM2.52 in August 2020, the counter retreated 81% due to industry-wide issue of downtrending average selling price for gloves, oversupply and stagnant demand growth.
Source: The Edge Markets