PETALING JAYA: HLT Global Bhd is proposing to acquire the remaining 45% stake of its 55%-owned rubber glove subsidiary HL Rubber Industries Sdn Bhd (HLRI) for RM90 million to be satisfied via the issuance of 90 million shares at an issue price of RM1.00 per share.
HLT today entered into a conditional share sale agreement (SSA) with Suntel International Co Ltd, Hup Lek Engineering & Trading Sdn Bhd and Teng Kok Fah for the proposed acquisition of the 40% stake held by them for RM80 million to be satisfied via the issuance of 80 million shares at an issue price of RM1.00 per share.
HLT is also in the midst of negotiation with Lau Siong Hut for the acquisition of Lau’s 5% stake in HLRI for RM10 million on parallel terms as the SSA.
“The proposed acquisition is in line with the group’s business expansion plan for its rubber glove manufacturing division given the favourable prospects of the rubber glove industry and HLRI. Through the exercise, HLT will be able to have full control over HLRI, in terms of absolute shareholding as well as its overall operations and future business direction,” HLT said in a stock exchange filing.
The proposed acquisition is expected to enhance the profitability of the group as HLT will be able to consolidate the entire earnings of HLRI, which will in turn improve the overall financial position of the group; and will enable HLT to be in a better position to lend its support to HLRI via, among others, the provision of financing assistance for any future business expansion.
For the 10 months ending Oct 31, 2020, HLRI recorded an unaudited profit after tax of RM32.58 million on the back of a revenue of RM125.32 million.
The application in relation to the exercise is expected to be submitted to Bursa Securities within two months. The exercise is expected to be completed by the first quarter of 2021.
