Asia Poly to diversify into property development

PETALING JAYA: Asia Poly Holdings Bhd plans to acquire the entire stake in High Reserve Land Sdn Bhd (HRLSB) and diversify its business to include property development.
In a filing with Bursa Malaysia yesterday, the cast acrylic products manufacturer announced the proposed acquisition of HRLSB for a purchase consideration of RM16 million, to be satisfied via RM8 million in cash and the issuance of 49.4 million new Asia Poly shares at an issue price of 16.18 sen each.
HRLSB is involved in property development and is the registered owner of a parcel of commercial land measuring 1.9 acres with approved development order in Semenyih, Selangor.
The proposed development for the land has a gross development value of RM39.9 million with a gross development profit of RM8.7 million. Asia Poly expects to undertake the proposed development in the fourth quarter this year.
As part of its strategic growth plan, the group intends to diversify and expand its business activities to include property development in order to provide an additional revenue and profit stream to the group.
It said that the proposed development is expected to contribute positively to the group’s future earnings, improve the group’s financial position and complement its existing cast acrylic business.
Asia Poly also proposed a rights issue of up to 395.6 million new irredeemable convertible preference shares of 5 sen each in Asia Poly (ICPS) on the basis of one ICPS for every one existing held, together with up to 98.9 million free detachable warrants.
Based on the issue price of 5 sen per ICPS, the proposed rights issue of ICPS with warrants will raise total gross proceeds of between RM5 million and RM19.7 million, which will be used for the setting up of a coating plant (up to RM12.35 million), working capital and repayment of bank borrowings.
The proposals are subject to approval from Bursa Securities and shareholders of Asia Poly, and are expected to be completed in the third quarter this year.