KUALA LUMPUR: Rubberex Corp (M) Bhd has proposed to place out as much as 83.2 million new shares as the glove maker seeks to cash for its capacity expansion.
The company has announced plans to build a third nitrile disposable glove factory near Ipoh, Perak, which was projected to increase the group's production capacity from current 2.5 million pieces a year to 10 million pieces.
"The Board believes that the increase in nitrile disposable gloves production lines will contribute positively to the future earnings of Rubberex Group," the glove maker said in a filing with Bursa Malaysia today.
The new placement shares would increase the group's issued share capital by 10%.
Assuming that the new shares would be issued at 94.5 sen each, the placement exercise would raise RM78.6mil for the company.
The stock was last traded at RM1.02 on Monday.
Rubberex said today that construction work of the proposed factory has not started, but the design would allow the facility to house 28 double- formers lines for the production of nitrile disposable gloves.
"The total estimated cost to acquire and install the 28 double-formers nitrile disposable production lines is approximately RM400mil," it said.
The group planned to install the new lines in stages, with the first 14 double-formers lines to be commissioned by the first half of 2022 and the remaining by the second half of 2022.
"After due consideration of the various methods of fund raising, the Board opines that the Proposed Private Placement is the most appropriate avenue of fund raising," it said.