Ho Wah Genting shares fall on news of diversification

PETALING JAYA: Ho Wah Genting Bhd, which is diversifying into the travel retail business, saw its share price fall 7.69% this morning.
At 10.51am, its share price fell 7.69% or 0.5 sen to 6 sen with a total of 9.41 million shares traded. The stock closed unchanged at 6.5 sen yesterday, with some 6.31 million shares traded.
The company told Bursa Malaysia yesterday that it has planned a slew of corporate exercises, including the diversification, share consolidation and private placement to raise up to RM20.18 million.
It said that it will consolidate every four existing shares into one share, which could potentially reduce the volatility of the trading price with a reduction in the number of shares.
The company is involved in the manufacturing of moulded power supply cord sets, trading of wires and cables, tin mining and travel services.
The diversification into the travel retail business is pursuant to the shareholders’ agreement dated Sept 25, entered into with Dufry International AG for the operation of a duty and tax free shop in Genting Highlands resort.
Meanwhile, the proposed private placement entails the issuance of up to 77.62 million new consolidated shares, representing up to 30% of its issued shares. Proceeds raised will be used for working capital for its manufacturing and tin mining divisions.