Southern Cable Group Bhd managing director Tung Eng Hai
KUALA LUMPUR: Southern Cable Group Bhd
has proposed a private placement of up to 10% of its issued shares to fund its multi-year expansion plans and tap growing demand for cables and wires in both domestic and overseas markets.
In a statement, the cable and wire manufacturer said the expansion will increase the group’s annual cable and wire output by 25% to 65,000 km/year, from 51,980 km/year as at June 30, 2025.
Concurrently, it will triple its aluminium rod production to over 60,000 tonne per year, from approximately 20,000 tonne a year as at June 30, 2025.
Southern Cable said these expansions will be carried out in stages and are targeted to be completed by the end-2027.
Managing director Tung Eng Hai said the group is expanding to meet rising demand for cables and wires, while supporting Malaysia’s development through projects in power utilities, renewable energy, construction, infrastructure, and data centres.
“To achieve our long-term growth aspirations, we are also increasing our overseas revenue, with a target to have it contribute 30% of total revenue within the next three years.
“The funds raised will strengthen our manufacturing capabilities and support our vision of becoming a leading integrated cables and wires manufacturer in the region,” he said.
At an indicative issue price of RM2.16 per share, the proposed private placement is expected to raise gross proceeds of between RM218mil and RM259mil under the minimum and maximum scenarios, respectively.
Of the total proceeds expected from the proposed exercise, RM129mil will be set aside for capital expenditure and expansion.
The funds will be used to construct and renovate factories and warehouses near the group’s existing operations in Kuala Ketil, Kedah, acquire an additional warehouse, and purchase new machinery and equipment.
Key investments include two new production lines for medium to extra high-voltage cables and a high-capacity aluminium furnace, to be installed on Lots 20, 21 and 22 next to the existing Kuala Ketil facilities.
Southern Cable will also build a new facility beside Lots 20, 21 and 22 to house machinery for low-voltage cable and wire production, while introducing a new range of low-voltage products.
Separately, RM5.1mil will be utilised to settle the balance purchase price of an industrial land previously acquired in July 2025, and related expenses.
The remaining proceeds will mainly go towards working capital for purchasing raw materials such as copper, aluminium and plastic compounds to support the group’s growing production capacity. Part of the funds will also be used to repay borrowings and cover expenses related to the proposed exercise.
RHB Investment Bank Bhd has been appointed as the principal adviser and sole placement agent for the proposed private placement.
