Last week, Sanichi Technology Bhd announced that it had received valid acceptances for a total of 738.66 million rights shares at 10 sen each, representing 99.78% subscription of the rights shares available for subscription under the rights issue with warrants. This would raise RM73.87 million, excluding the warrants being converted.
But Sanichi still has RM36 million from a cash call in 2016, when it decided to venture into property development, and as at end-September, it had RM74.35 million in cash and cash equivalents. The company had no long-term borrowings and only RM961,000 in short-term debt commitments.
Thus, with the recent rights issue, Sanichi will have close to RM150 million in cash for its property development plans.
Last week, it announced a memorandum of understanding for a 70:30 joint venture with Singapore-based FKS Holdings Pte Ltd to provide fresh produce to international food and beverage players in collaboration with Japanese partners, and the provision of Japanese cuisine for regional markets, namely Singapore, Malaysia, Indonesia, China and Australia.
Last month, it said it was venturing into the Indonesian remittance business and would eventually partner “one of the largest public-listed government-linked companies in Indonesia”. Despite the vague statement, it was not questioned by the exchange, at least not publicly.
In May, Sanichi announced plans to acquire a Cessna Citation aircraft for RM9.83 million for the use of key personnel in order to maintain strong business relationships overseas. Looks like Sanichi is fast diversifying from designing and fabricating precision moulds and tooling, but somehow, going into property development, remittance services, and now the food business, raises questions.