Malaysia-based LKL International Bhd (LKL), an investment holding company involved in the manufacturing and trade of medical equipment and accessories, is planning to diversify into the rubber gloves and personal protective equipment (PPE) sector. The company is reportedly proposing a private placement of up to 355.05 million placement shares at an issue price to be determined later, of which proceeds will be utilised for the new businesses.
The group also plans to enter into distribution agreements with suppliers of rubber gloves and PPE.
It said that the proposed diversification will allow the group to capitalise on the increasing demand for rubber gloves and PPE while making the most out of the opportunities created by the Covid-19 pandemic. Moreover, it will also provide an additional revenue stream to the group’s current core business.
Based on the illustrative issue price of RM0.16 per placement share, some RM56.81 million to be raised from the proposed private placement would be utilised for the trading of rubber gloves and PPE, setting up new storage facilities, and defray expenses for the proposals.
LKL said it reasonably expects its future participation in the new businesses may result in the diversion of more than 25% of the net assets of LKL Group, and may result in contributing 25% or more of the group’s net profits.
The company is said to propose to seek approval from the shareholders for the diversification.