Kanger International Bhd plans to buy a 51% stake or 1.02 million shares of Sung Master Holdings Sdn Bhd worth RM94.79 million.
In a filing to Bursa Malaysia yesterday, Kanger said the company also proposed a new subscription of 769.51 million shares, representing 30% of the total shares issued at a subscription price of 6 sen by its executive director, Kuah Choon Ching.
According to the information, Sung Master is a company involved in the sale and trading of building materials such as wood floors, tiles, bulk cement, concrete and sanitary ware similar to Kanger's current business activities, namely the production and trading of building materials.
"Following the same business for Kanger and Sung Master, the proposed sale will lead to the expansion of existing business activities namely manufacturing and trading businesses and expand product offerings which are expected to increase Kanger's revenue and earnings in the future," the statement said. .
He added that the subscription was the most ideal method to raise funds immediately to meet part of the purchase consideration for the proposed acquisition.
"It is also the most efficient method to raise funds because it allows the company to raise funds at lower costs and expenses compared to other financing options such as bank loans which will increase debt obligations and interest costs to the company," he explained.
In addition, the notice states that this will enable the company to protect its existing cash flow for its operational purposes and future business investment opportunities.
