KUALA LUMPUR: Asia Poly Holdings Bhd
plans to diversify into property development and to add value to its existing product by setting up a coating plant to hard coat its cast acrylic sheets.
In a filing with Bursa Malaysia on Wednesday, the cast acrylic sheet maker announced several proposals, including a proposed rights issue of irredeemable convertible preference shares (ICPS) to fund the plant.
The company said it had signed an agreement to buy the entire equity interest in High Reserve Land Sdn Bhd, which owns 2.0 acres of freehold land in Semenyih, Selangor, for RM16mil, half of which would be satisfied in cash and the rest via the issuance of 49.44 million new Asia Poly shares.
It plans to develop shoplots with basement car park bays on the land, with a gross development value of RM39.97mil.
Asia Poly executive chairman and major shareholder Datuk Yeo Boon Leong is a director and controlling shareholder (80%) of High Reserve Land.
Asia Poly said the group was currently also in the midst of exploring, discussing and negotiating with other parties to undertake other property development projects.
The group, whose manufacturing facility in Klang produces on average 600 metric tonnes of acrylic sheets a month, said it plans to build a coating plant with a built-up area of 1,000 sq metres at its current warehouse land space.
To finance the project, it proposed to issue up to 395.68 million new ICPS of 5 sen each, together with free detachable warrants based on one ICPS for each ordinary share held and a warrant for every four ICPS.
The rights issue is expected to raise gross proceeds of up to RM19.78mil, based on an issue price of 5 sen per ICPS. (Two ICPS shares or 1 ICPS plus 5 sen cash can be converted into one new Asia Poly share.)
Asia Poly aims to use up to RM12.35mil from the proceeds to set up the plant while the rest will be used for working capital and to repay bank borrowings.
Asia Poly said that by hard coating its acrylic sheets, these sheets would be more resistant to abrasion and scratching, spurring increased usage of hard coated acrylic sheets in different application markets such as advertising and visual communications, architectural and building construction, and transportation and furniture manufacturing.
This, the company said, would lead to higher revenue and improved gross profit margin for the group. It intends to secure more high-net-worth customers in global markets.
Asia Poly said the board expected the proposals to be completed in the third quarter of this year.
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