MQ Tech to develop Malacca theme park, announces cash call

Brief Caption:An MQ worker using a coordinate measure machine to check the measurement of a tooling part used in hard disk drive.

KUALA LUMPUR: Mould manufacturer MQ Technology Bhd plans to diversify into the theme park business with a proposed joint venture (JV) to develop the Dive Park Zone at Malacca Explorer Resort in Klebang.

MQ Tech, which makes moulds and other tools for manufacturing products such as hard disk drives, also proposed on Tuesday a par value reduction, a share consolidation and a rights issue with warrants, among others.

In a filing with Bursa Malaysia, the company said its unit Star Acres Sdn Bhd signed a subscription and shareholders’ agreement with Cash Support Sdn Bhd (CSSB) in which Star Acres would hold a 51% stake in the theme park JV company.

CSSB, which is 99.6% owned by Datuk Seri Teh Chee Teong, will sell the 9.16-acre reclaimed land for the project to the JV company, Cash Support Property Sdn Bhd, for RM28.3mil, of which Star Acres will pay RM15.9mil in cash. The land’s market value is RM31.19mil according to an independent property valuation firm.

The project land forms part of a mixed development comprising residential, commercial and recreational amenities known as Malacca Explorer Resort, which is currently in different phases of development. It was reported in 2012 that the mixed development would have a gross development value of RM183mil.

The Dive Park Zone theme park has two phases. The first phase, to be launched in the third quarter of this year, has been partially completed, consisting of an arena stage for arts and culture shows.

MQ Tech said currently the second phase was at the initial conceptual design and planning stage, expected to be finalised by the first half of 2017.

The company added that the estimated project cost and estimated revenue were yet to be determined.

MQ Tech said it would continue with its existing business following the proposed diversification, which is subject to shareholders’ approval at an EGM.

The company also proposed a par value reduction involving a cancellation of 5 sen of the existing par value of every existing 10-sen ordinary share, which will result in a total credit of up to RM13.95mil to be used to wipe out its accumulated losses at company level.

After the proposed par value reduction, the company will consolidate every two MQ shares into one new MQ share of 10 sen each.

The share consolidation will result in an upward adjustment to the market price of the listed MQ shares.

After this, the company plans to issue up to 418.47 million rights shares on the basis of three rights shares for every existing MQ share held, together with 278.98 million warrants on the basis of two warrants for every three rights shares subscribed.

The issue price of the rights shares and the exercise price of the warrants will be decided at a later date.

The proposed rights issue with warrants is expected to raise between RM18.05mil and RM41.85mil, of which RM15.9mil will be used to subscribe to Cash Support Property shares.

MQ Tech also proposed to set up a new share issuance scheme of up to 30% of the issued and paid-up share capital of the company (excluding treasury shares, if any) at any one time during the duration of the scheme for the eligible directors and employees of the group.

MQ Tech shares ended trading on Tuesday half a sen lower at 7.5 sen, with 2.162 million shares. 

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