KUALA LUMPUR (Jan 2): Rubberex Corp (M) Bhd plans to dispose of its manufacturing operations in China for HK$135 million (RM71.6 million).

The proceeds from the sale will partly be used to repay borrowings, which amounted to HK$49.7 million as at Sept 30, 2018.

Another RM20.9 million has been earmarked for the expansion and automation of its production lines of nitrile disposable gloves at the group's existing production facilities in Ipoh, Perak.

Rubberex said the HK$135 million disposal consideration represents a 37% discount to the carrying value of the retained assets based on the consolidated audited financial statements of Rubberex as at Dec 31, 2017 of RM113.7 million.

"The expected loss on the proposed disposals is RM5.7 million," it added.

In a filing with Bursa Malaysia today, Rubberex said it has entered into a conditional share sale agreement with Nutraceutical Biotech Global Holdings Ltd to dispose of its entire equity interest in wholly-owned subsidiaries Pioneer Vantage Ltd and Lifestyle Investment (Hong Kong) Ltd (LHK).

Both Pioneer Vantage and LHK are engaged in the manufacturing and export of vinyl disposal gloves, serving the European, North and South American markets.

The proposed disposals are expected to be completed by the second half of 2019, said Rubberex.

Rubberex shares closed one sen or 2.27% higher at 45 sen today, bringing a market capitalisation of RM113.41 million.