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KUALA LUMPUR (June 12): Glove maker Careplus Group Bhd, which has seen a nine-fold jump in its share price this year, is proposing a private placement to fund new production lines.

The group said it intends to raise up to RM82.96 million by issuing up to 53.14 million shares, equivalent to 10% of its outstanding share capital.

The shares will be placed to independent third party investors to be identified later at an issue price that will also be determined later, the group said in an exchange filing.

The issue price, it said, will not be priced at a more-than-10% discount to the five-day volume weighted average market price of Careplus shares immediately before the price fixing date.

For illustration purposes, the group said based on an issue price of RM1.5613 per share, the placement shares could raise up to RM82.96 million.

Careplus said the bulk of the money raised will be used to buy machinery for the setting up of 11 new production lines and a surgical packaging machine.

The group said the estimated cost for the purchase of  machinery for the new production lines and surgical packing machine is RM96 million. The shortfall of RM19.5 million will be funded by the group internally and with contribution from its joint venture partner, Ansell Service (Asia) Sdn Bhd.

The group expects the private placement to be completed by the third quarter of this year.

Careplus shares closed 1.35% or two sen lower at RM1.46 today, giving the group a market capitalisation of RM775.79 million.

http://www.theedgemarkets.com/article/careplus-announces-private-placement-raise-money-glove-production-expansion
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