KUALA LUMPUR (May 4): Rubberex Corp (M) Bhd is planning to undertake a private placement to raise RM31 million to expand its production lines for nitrile gloves.
In a bourse filing, the group said it would issue 25.22 million new shares, representing 10% of its share capital of 252.2 million shares.
Upon completion of the placement, the group’s share capital will increase to 277.43 million shares.
Rubberex said the placement shares will cost RM1.23 apiece, representing a 10% discount to its five-day volume-weighted average market price of RM1.36 as of April 30.
The rubber gloves manufacturer said the shares will be placed among third-party investors, with RM30.7 million of the proceeds used to expand the glove lines for nitrile gloves. The balance will be used to defray the cost of the private placement.
Rubberex said that after the placement has been concluded, the built-up area of its factory will increase to 110,000 sq ft, from 92,000 sq ft at present.
In terms of production lines, five double-former lines will be installed on top of the current eight single-former lines it has.
Additionally, the group’s installed capacity will increase to 2.5 billion pieces a year, from one billion pieces currently.
“The board believes that the increase in nitrile disposable gloves production lines will contribute positively to the future earnings of Rubberex Group,” the group said.
It added that the placement is expected to be completed in the third quarter of 2020.