SLP seeks to raise up to RM40m via private placement, proposes 1-for-5 bonus issue

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KUALA LUMPUR (May 5): SLP Resources Bhd has proposed a private placement in a bid to raise up to about RM40 million, paired with a one-for-five bonus issue.

The private placement entails 16.8 million new shares, representing 6.79% of SLP's existing issued share capital, the plastic packaging solutions provider said in a filing today.

SLP said the bulk of the proceeds would be used to fund the construction of a new warehouse, as well as to acquire two high-performance blown film lines.

"This will enable the company to expand its existing production capacity from 24,000 metric tonnes per year to 32,000 metric tonnes per year," it added.

The company expects the two exercises to be completed by the third quarter of this year.

Separately, SLP reported a 19.96% fall in net profit to RM4.07 million for the first financial quarter ended March 31, 2017, from RM5.09 million a year ago. Revenue was up by a marginal 2.93% to RM45.99 million from RM44.68 million previously, as the stronger greenback against the ringgit lifted the average selling price for its exports.

On its prospects for the current financial year, SLP said it remains vigilant on the volatility in the prices of plastic resin, which makes up a major portion of the cost of goods sold by the company.

"The enhancement of the group's product portfolio for the packaging of food and beverages, and healthcare products, as well as the expansion in manufacturing capacity after the installation of new high technology printing line in 4QFY16 has boosted the group's capability to produce high quality plastics packaging bags and films through the latest technologies," it added.

Shares of SLP rose two sen or 0.76% to RM2.66 today, giving the company a market capitalisation of RM652.96 million.