KUALA LUMPUR, Nov 29 — EP Manufacturing Bhd (EPMB), a company mainly involved in automotive and engineering, is undertaking a proposed private placement which is expected to raise gross proceeds of up to RM56.9 million.
In a filing with Bursa Malaysia today, the group said that this will mainly be utilised to increase its production efficiency, equipping itself with the necessary facilities for the assembly of new car models as well as to allow EPMB to diversify into the property development business.
“In addition, EPMB is also undertaking a proposed disposal and leaseback to monetise its investment in Glenmarie Properties which will contribute towards the abovesaid utilisation. This will be done for a disposal consideration of RM53.5 million.
“Glenmarie Properties comprises two pieces of freehold land with buildings at Bandar Glenmarie with a total gross floor area of 107,214.2 sq ft and 75,163.5 sq ft respectively,” it said.
Its deputy executive chairman Zulkefly Baharuddin said the injection of fresh funds amounting to RM110.4 million will support the working capital of the group as it moves onto its forward agenda.
“Besides strengthening our presence profiling in the Tier 1 automotive business to respective original equipment manufacturers (OEMs), we intend to diversify into the property business with land bank in Sabah that holds a potential gross development value of RM1.4 billion.
“With the placement and disposal of assets, the net cash at hand can be used for further consolidation and expansion activities,” he said.
In a separate filing, for the third quarter financial result ended Sept 30, 2021, the group recorded a net loss of RM7.13 million as compared to RM230,000 posted in the preceding year quarter, while revenue fell to RM41.7 million in the current quarter under review compared to RM127.1 million previously.
Zulkefly said the lower revenue was mainly due to the full lockdown under Movement Control Order (MCO) 3.0 where the automotive industry was not allowed to operate starting June 1, 2021.
“Due to factory shutdowns and intermittent COVID-19 cases, we were effectively only able to operate at full capacity for a total of one month in the quarter. Thus, our results have been affected because of the MCO restrictions and this is an issue across the board for most industries in the country.
“However, we remain positive on sales recovery for the last quarter of this year after resumption in production and sales activities. Consumer demand is also rising due to the vehicle sales tax exemption which has been extended to June 30, 2022,” he added.
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