VS Industry subscribes for rights shares in HK unit

PETALING JAYA: V.S. Industry Bhd plans to take up a 43.49%, or 200 million of the rights shares to be issued by V.S. International Group Limited (VSIG) at HK$0.23 (RM0.13) for RM25.2 million.

The subscription will be funded via bank borrowings. Trading in VS Industry’s shares, which were halted for an hour pending the announcement at opening, closed trade five sen higher at RM2.05 with some 4.18 million shares done.

VSIG plans to use the proceeds of not less than HK$102.8 million, to repay short-term bank borrowings, fund a new dual lane assembly line, new high tonnage injection machineries, automated equipment and general working capital.

V.S. Industry said it is taking part in the exercise because the group experienced significant increase in both revenue and profit for the six months ended Jan 31, 2017, thanks to a large manufacturing contract signed in mid-late 2016 with an existing customer.

The rights issue price is a 17.8% discount to the last trading price of VSIG of HK$0.28.