K-Star to diversify into construction

PETALING JAYA: Loss-making K-Star Sports Ltd, which is involved in the designing, manufacturing and distribution of sports footwear, proposed a diversification into the construction industry as it could secure more projects, which may contribute more than 25% of its net profit in the future.
On Sept 12, the group announced the acquisition of the entire stake in Sinaran Trilion Sdn Bhd (STSB), which has secured a project from a main contractor Majuvera Construction Sdn Bhd for foundation works for 60 power transmission line towers in Seremban with a contract value of about RM1.5 million.
In addition, STSB is in the midst of discussions with other parties to tender and/or secure other projects, but nothing has been finalised at this juncture.
The group intends to finance these projects via internally generated funds and/or bank borrowings and/or equity fundraising exercises.
On another note, K-Star announced that it will be undertaking a placement of shares exercise of up to 30% of its share capital and a proposed issuance of up to 152.38 million warrants on the basis of two warrants for every five existing K-Star shares held.
The group plans to raise up to RM5.7 million from the placement exercise, of which RM4 million will be used for its footwear business, and RM1.4 million for its construction business.
K-Star shares closed 7.69% higher at 7 sen on Friday with 1.03 million changing hands.