Central Global proposes private placement of up to 18 million new shares

KUALA LUMPUR: Main Marketlisted Central Global Bhd (CGB) has proposed a private placement of up to 18 million new shares representing not more than 20 per cent of the group’s total number of issued shares to qualified third-party investors to be identified at a later date.

CGB is a manufacturer of specialised industrial tapes and label stocks that pioneered industrial hi-temp masking tapes manufacturing and is a one-stop solution provider for crepe paper masking.

The group’s other business is construction, where it is currently mostly active in the northern region of Peninsular Malaysia.

The proposed placement may be implemented in several tranches within six months from the date of approval from Bursa Malaysia Securities Bhd (Bursa Securities), with there being potentially several pricefixing dates and issue prices of the placement shares to be determined separately and fixed by the board of directors of CGB after the approval from Bursa Securities. These new shares will carry the same rights as the existing issued shares.

The proceeds from the private placement will be used for a new masking tape coater production line, funding for an existing construction project, working capital and, estimated expenses related to the private placement exercise.

The group’s board of directors have laid out plans to fortify the manufacturing business while at the same time expand the construction business through more contracts.

“The private placement exercise is in line with our plans for the production of masking tapes in the group’s manufacturing business,” CGB executive chairman Dato’ Faisal Zelman said.

“We want to focus on keeping critical production volumes up, undertake efforts to drive efficiencies in production that can minimise wastage as well as ensure consistency in product quality, which is key to recurring orders especially for our export orders.

“We are also using the proceeds to fund a project in Pulau Pinang from our construction business. We were awarded this project in January 2020 and work commenced in July 2020.

“We will continue to undertake construction projects and have tendered for several projects.

“A portion of the proceeds from the private placement exercise will also be used for working capital purposes as well as accelerating future business expansion.”

TA Securities Holdings Bhd has been appointed the advisor and the placement agent for the proposed private placement.

CGB has proposed a private placement of up to 18 million new shares representing not more than 20 per cent of the group’s total number of issued shares to qualified third-party investors to be identified at a later date.