VS Industry Bhd managing director Gan Sem Yam with some of the parts and components produced by the company's manufacturing facilities in Senai, Johor.
KUALA LUMPUR: VS Industry Bhd
’s 43.5%-owned Hong Kong-listed associate, VS International Group Ltd (VSIG), has proposed a one-for-four rights issue to raise between HK$105.8mil (RM58.2mil) and HK$114.5mil (RM62.9mil) to fund its business expansion in China.
In a statement, the electronics manufacturing services company said HK$9mil of the proceeds would be used for the new dual lane surface mounting technology assembly lines and HK$12mil for new high tonnage injection machinery to increase production capacity.
“HK$35mil will be used for the repayment of short-term bank borrowings for the construction of new warehouses to increase VSIG’s storage capacity, HK$23mil for additional automation equipment for current facilities to enhance production efficiency and the balance will be utilised as general working capital,” it said.
Managing director Datuk SY Gan said the proceeds raised from the proposed exercise would allow the company to expand and enhance the manufacturing capabilities and capacities of its plants in Zhuhai, China.
“VSIG is currently engaged in talks to potentially secure multiple large contracts for our China operations,” he said.
As the largest shareholder of VSIG, Gan said VS would benefit once the new contracts materialise and begin contributing to the group’s earnings.
“The proposed rights issue is expected to be completed by mid-September,” he added. - Bernama
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