In a bid to branch out into the property market and improve it earnings, cast acrylic products manufacturer Asia Poly Holdings plans to take over High Reserve Land Sdn Bhd (HRLSB).
According to a filing with the local stock exchange, Asia Poly intends to acquire the entire stake of HRLSB for RM16 million, consisting of RM8 million in cash and the issuance of 49.4 million new Asia Poly shares valued at 16.18 sen apiece.
Besides being a property developer, HRLSB possess a parcel of commercial land measuring 1.9 acres in Selangor’s Semenyih area, with an approved development order.
The upcoming project has a gross development value (GDV) of RM39.9 million, of which RM8.7 million is the developer’s revenue.
Construction work on the proposed project is expected to start in Q4 2016, said Asia Poly, adding that the development is expected to boost the group’s profitability in the future and complement its cast acrylic business.
Moreover, the company plans to issue as much as 395.6 million new irredeemable convertible preferred shares (ICPS) at 5 sen each, together with up to 98.9 million free detachable warrants.
From the issuance, Asia Poly expects to raise RM5 million to RM19.7 million. Of this, up to RM12.35 million will fund the construction of a coating factory, while the remainder will be used as working capital or to repay bank loans.
The aforementioned deal and the proposed issuance are targeted to be completed by Q3 2016, subject to the approval of Asia Poly’s stakeholders and Bursa Malaysia authorities.
Image sourced from The Star
Diane Foo Eu Lynn, Senior Content Specialist at PropertyGuru, edited this story. To contact her about this or other stories email email@example.com