EG Industries rights issue 26.1 times oversubscribed

SUNGAI PETANI: Electronic manufacturing services (EMS) provider EG Industries Bhd’s renounceable rights issue of redeemable convertible preference shares (RCPS) was oversubscribed by 26.1 times.

The rights issue entailed the issuance of 52.9 million RCPS of 95 sen each. Together with the total valid acceptances and excess rights, EG Industries received applications for 66.7 million RCPS worth RM63.4 million, representing an oversubscription of 26.1 times.

At an issue price of 95 sen per RCPS, the corporate exercise raised RM50.2 million in proceeds, which will be utilised primarily for business expansion.

“The proceeds will facilitate our continued growth in the EMS sector by acquiring more machinery to expand capacity for the second factory in Sungai Petani, enhancing our research and development capabilities, and granting us more working capital to reinforce our objective to be a strong partner for international customers,” EG Industries group CEO and executive director Alex Kang said in a statement.

The one-for-four rights issue with bonus issue will eventually increase the group’s total outstanding shares to 386.3 million, from 211.6 million as at June 30, 2016.

EG closed 0.66% higher at 76 sen yesterday with 2.86 million shares traded.