KUALA LUMPUR (July 4): Pentamaster Corp Bhd has subscribed for a 29.9% stake in the enlarged capital of Taiwan-based Everready Precision Industrial Corp (EPIC) for US$6.78 million (RM29.89 million), in a debt-to-equity exercise.

Pentamaster's wholly owned Pentamaster InnoTeq Sdn Bhd has subscribed for the 16.61 million new shares in EPIC at US$0.4079 per share, following an arm's-length negotiation between the two parties, it said in a filing.

EPIC is involved in the design and manufacturing of end-to-end optoelectronics solutions that cover optical molds to lenses and 3D sensing modules.

For the financial year ended December 2021 (FY21), EPIC booked a net loss of NT$25.35 million (RM3.75 million) on a revenue of NT$252.62 million. The company had debt of NT$326.29 million and gearing of 50.3%, according to Pentamaster.

The deal took into account EPIC's intellectual properties, technological know-how and its Greater China plans that "are meeting Pentamaster Group's business strategy objectives", Pentamaster said.

"EPIC has also proposed establishing a manufacturing joint venture in China with the investment arm of a major enterprise in China for its business expansion, where the [share] subscription price has factored in such a plan by EPIC," it added.

Pentamaster said the exercise is intended to expand its business into synergistic technology solutions and applications, particularly a vertical integration for its electro-optical segment.

"The optoelectronics market has witnessed growing consumption across various verticals as technology advancements and the growing demand for 'smart' electronics with high precision and quality fuel such demand," it said, pointing to the 10.25% compounded annual growth for the segment globally in 2020-2026.

Shares of Pentamaster slipped two sen or 0.56% to settle at RM3.55, giving it a market capitalisation of RM2.53 billion. Year-to-date, the counter has dropped 36.04%.