KUALA LUMPUR (Sept 6): BSL Corp Bhd has signed a memorandum of understanding to acquire Singapore-based SD Unify Pte Ltd as part of its effort to increase its exposure in the semiconductor sector.

In a Bursa Malaysia filing today, the group said SD Unify operates an International Procurement Office Centre, connecting the overseas supply chain for semiconductor original equipment manufacturers Approved Vendor Lists components.

This is complemented by SD Unify's "One Stop Solution" concept for the manufacturing, sourcing and supplying of electro-mechanical products for semiconductor producers, it added. The purchase price has yet to be determined.

Commenting on the group's acquisition, BSL Corp executive director Brian Hoo Wai Keong said given the current market demand, the proposed acquisition of SD Unify is timely for the group to extend its market reach in the semiconductor sector.

"BSL Corp is involved in contract manufacturing with exposure in the electrical and electronics, solar farm & renewable energy and to a smaller extent, semiconductor sectors.

"With this proposed acquisition, BSL Corp will be able to increase its exposure in the semiconductor industry. This is part of BSL Corp's revitalisation strategy to fast forward our exposure in the semiconductor industry," he said in a statement today.

Hoo added the semiconductor segment will form a new pillar of growth for BSL Corp and complement its current operations as the group transitions to an Electronic Manufacturer Services company.

Citing the Semiconductor Industry Association, BSL Corp noted that the industry reported total worldwide sales of US$436.8 billion (RM1.81 trillion) in 2020, an increase of 5.8% over 2019.

"This is a notable increase due to the impact from the pandemic which severely interrupted the supply chain last year," it added.

BSL Corp also announced last Friday the proposed private placement to enhance and expand the existing semiconductor manufacturing capacity.

The corporate exercise entails a new issuance of up to 30% new shares based on the enlarged share capital base after share split involving a subdivision of every one existing ordinary share into two shares. Additionally, BSL Corp would declare bonus issue of one free warrant for every two shares held after the share split and private placement.

Hoo noted that the group has embarked on an enhancement and expansion exercise which will be expanding the gross floor area of BSL Corp's production facilities by 1,950 sqm to 25,039 sqm.

"This will include the reconfiguration of the existing production lines and additional capital expenditure to upgrade and install new production lines.

"The reconfiguration will also include enhancing the current low volume high mix production to include higher value-add and margin products," said Hoo.

Hoo added that the share split and issuance of bonus warrants are expected to help improve liquidity of the current share capital base as well as to reward the existing shareholders who have maintained their investments in BSL Corp.

"The estimated funds to be raised from the private placement are RM30 million, based on the current share price, of which RM24 million will be allocated for the enhancement and expansion exercise," he noted.

At the time of writing, shares in BSL Corp rose 36 sen or 29.75% and hit a limit up of RM1.57, valuing the company at RM118.58 million.