KUALA LUMPUR, 30 JUNE: GIIB Holdings Bhd, formerly known as Goodway Integrated Industries Bhd, has gained approval from its shareholders to expand its operations to include glove production and raise up to RM65.33 million through a rights issue with warrants. This decision was made during the company’s extraordinary general meeting today.
GIIB would establish five double former glove-dipping manufacturing lines at its current warehouse in Nilai, Negeri Sembilan, as a result of the approval. The lines are expected to be able to produce 1.05 billion pairs of gloves every year.
Latex and nitrile gloves can be made on the same production lines. The present warehouse is planned to be converted by the end of next month.
The first manufacturing line is scheduled to start in November, with all five lines slated to be completely operational by February of next year.
To fund this diversification, GIIB will issue up to 362.94 million new shares and up to 362.94 million free warrants in a one-for-one renounceable rights issue, with one warrant for every one rights share subscribed.
Based on the indicative issue price of 18 sen per rights share, excluding profits from the exercise of the warrants, the proposed exercise is projected to yield gross proceeds of up to RM65.33 million. The eligibility for the rights issue and free warrants will be established at a later date, which will be announced.
The group’s substantial shareholders — GIIB CEO and Executive Chairman Tai Boon Wee, executive directors Tai Qisheng, Alison Wong Ping Kiong, and Wong Huo Siing — have provided irrevocable undertakings to subscribe for the rights issue with warrants to meet the minimum level of fun.
“With the plans approved, management can now completely focus on restructuring our business and working hard to create and strengthen the new business division,” Boon Wee said today in a statement.
“We are cautiously optimistic that the rights offer will raise sufficient capital, and we anticipate that the gloves business will become a new key revenue stream for the company in the future, bolstered by the glove industry’s bullish outlook and high backlog orders.”
In terms of its compounding segment, Boon Wee stated that the company will continue to focus on cost optimization and optimizing raw material utilization in order to generate value for its shareholders. In the 18 months ending December 31, 2020, the compounding division represented for 69.4 percent of the group’s total revenue of RM36.91 million.
GIIB shares fell 2 sen today, or 6.9%, to 27 sen, giving it a market capitalization of RM99.74 million. Continue reading
