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June 22, 2021

Rubberex Offers 10% Issued Shares

 Rubberex Corporation (M) Bhd plans to execute its private share offer to raise about RM78 million for the development of a nitrile disposable glove manufacturing plant in Perak.

The rubber glove maker said the proposal would involve the issuance of up to 83.23 million new shares, representing about 10% of the existing issued shares at an issue price to be determined later.

"For example, assuming the placement of the shares is issued at an issue price of 94.5 sen per share, this private share offer will collect gross revenue of about RM78.65 million," he said in a filing to Bursa Malaysia yesterday.

Bernama reported that of the total revenue, about RM69 million will be used to partially fund the acquisition, installation and commissioning of 28 new production lines.

The statement added that about RM9 million of the revenue would be used as daily operating working capital requirements and the remaining RM520,000 would be used for estimated expenses, such as fees to be paid to relevant authorities including consultancy and placement fees.

On January 22, Rubberex completed the acquisition of two plots of 4.82 hectares of leasehold land in Lahat, Perak for the construction of its third nitrile disposable glove production plant, which will house up to 28 double-formers production lines.

Although construction of the new plant has not yet begun, the company intends to commission all its production lines in stages over the next 24 months, with the first 14 lines expected to be commissioned by the first half of 2022 and the remaining 14 by the second half of 2022.

The new plant is expected to increase the group's glove production capacity by an additional 7.5 billion to 10.0 billion pieces per year compared to the current capacity of 2.5 billion pieces per year.

"The board is optimistic that the growth of the group's overall business will remain strong given the positive outlook for the glove industry," he said.