EP Manufacturing Bhd, a Bursa Malaysia Main Market listed company with automotive and engineering as main business, says it 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, the Group explained that this will mainly be utilised to increase the Group’s 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 the Glenmarie Properties which will contribute towards the abovesaid utilisation. This will be done for a disposal consideration of RM53.5 million.
The Glenmarie Properties comprises two pieces of freehold land with buildings at Bandar Glenmarie with a total gross floor area of approximately 107,214.2 sq ft and 75,163.5 sq ft respectively.
“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 Tier 1 automotive business to respective OEMs, we intend to diversify into the property business with a 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,” EPMB Deputy Executive Chairman Zulkefly bin Baharuddin.
In a separate announcement – for the third quarter financial result ended September 30, 2021 (3QFY21), the Group recorded a net loss of RM7.13 million as compared to RM0.23 million posted in the preceding year quarter.
Meanwhile, the Group recorded lower revenue of RM41.7 million in the current quarter under review compared to RM127.1 million in the preceding year corresponding quarter. This was mainly due to the full lockdown under Movement Control Order 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 3QFY21. 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,” Zulkefly adds.
