KUALA LUMPUR: Rhone Ma Holdings Bhd is acquiring a semi-detached factory at the Excellent Technology Park III in Klang for RM5.59 million.

Its wholly-owned subsidiary Rhone Ma Malaysia Sdn Bhd is buying the factory from property developer Klanggroup Development Sdn Bhd, the group said in  a filing with Bursa Malaysia.

Sitting on land measuring 1,750 square metres, the factory comprises a mezzanine store and a two-storey office. It is brand new as construction was completed this year.

Rhone Ma said the group plans to use the factory for storage of food ingredients should it decide to venture into the manufacturing of food ingredients in the future.

“The acquisition is line with the group’s future plans which include the expansion of the existing range of food ingredients as it allows the group to cater to the increasing storage needs of food ingredients,” it said.

The acquisition, said Rhone Ma, will be financed through a combination of internally generated funds and bank borrowings.

Assuming that 90% or RM5.03 million of the price is funded by borrowings and that the exercise had been completed by Dec 31, 2016, its borrowings would increase by 95.9% from RM5.24 million (as on that day) to RM10.27 million, while gearing would rise from 0.06 times to 0.11 times.

As a result of the additional bank borrowings, Rhone Ma said funds available for working capital purposes may be reduced and affect its cash flow position.

Still, Rhone Ma is optimistic that the acquisition will contribute positively to its business operations and future earnings.