MQTech outlines diversification plans
> Firm moving into higher technology manufacturing, theme park business with proceeds from rights issue
GEORGETOWN: MQ Technology Bhd (MQTech) is diversifying into higher technology industry and theme park business via its RM41.84 million rights issue.
MQTech executive director Lim Soon Seng said as part of its plan to increase sales, the group is making efforts to reduce its existing reliance on the hard disk drive industry, by producing fabricated precision products (eg tooling and dies) and components used in medical and other industries such as electronics as well as automation equipment.
“Our group intends to invest RM12.5 millions from the proceeds of the rights issue to extend the built-up area of our Penang factory from the existing 30,181 sq ft to 41,995 sq ft to cater for the expansion of its production capacity to produce larger precision parts and fabricate precision products and components used in medical and other industries, such as electronics as well as automation equipment,” Lee said in a statement.
The construction of the extension to the Penang factory is expected to commence in the first quarter of 2017 and completed within eight months.
“We intend to utilise RM9.60 million from the rights issue to purchase the equipment and machineries for the Penang factory, which include 5-axes CNC machine, vertical CNC milling machine, CNC turn mill and profile grinder,” said Lim.
These machines are expected to enlarge billable capacity from the current RM3.13 million to RM6.98 million per year.
“Our group is also presently negotiating to manufacture automation equipment for a potential customer. The sales orders, if secured, are expected to generate aggregate revenue of RM20 million over a period of 18 months,” said Lim.
MQTech will also be investing RM15.9 million from the rights issue proceeds into a new theme park, called “Malacca Explorer Resort – Dive Park Zone” on a reclaimed land measuring 9.16 acres in Klebang.
The development of the Malacca Explorer Resort will be carried out in two phases. The first phase consists of an arena stage with total gross floor area of 40,128 sq ft which was completed in September 2015, as well as a pop-up market, which is a retail space using 40-footer mobile cabin structure, to be completed in the first quarter of 2017.
The first phase of the theme park is expected to be launched in the first quarter of 2017, while the second phase of the theme park is currently at the initial conceptual design and planning stage which is expected to be finalised by the first half of 2017. The second phase will have a hotel, shoplots and various water rides.
MQTech ongoing renounceable rights issue is on the basis of three rights shares with two free warrants for every existing share at an issue price of 10 sen per rights share. The free warrants would entitle the warrant holders to subscribe new MQTech share at the exercise price of 10 sen at any time within the next five years.
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