Ho Wah Genting eyes diversification into travel retail biz

PETALING JAYA: Ho Wah Genting Bhd (HWGB) proposes a slew of corporate exercises, namely diversifying into the travel retail business, share consolidation and private placement to raise up to RM20.18 million.

In a filing with Bursa Malaysia, it said that it will consolidate every four existing shares into one share, which could potentially reduce the volatility of the trading price with a reduction in the number of shares.

HWGB is involved in the manufacturing of moulded power supply cord sets, trading of wires and cables, tin mining and travel services.

It noted that the diversification into the travel retail business is pursuant to the shareholders’ agreement dated Sept 25, entered into with Dufry International AG for the operation of a duty and tax free shop in Genting Highlands resort.

Dufry and HWGB respectively own a 51% and 49% stake in the joint venture entity Dufry HWG Shopping Sdn Bhd.

HWGB said it believes that the business venture with Dufry is an attractive business proposition in the face of steady visitor traffic in Genting Highlands over the past two years.

It anticipates that with the new business venture, this business segment may potentially contribute more than 25% of the net profits and/or net assets.

Meanwhile, the proposed private placement entails the issuance of up to 77.62 million new consolidated shares, representing up to 30% of its issued shares. Proceeds raised will be used for working capital for its manufacturing and tin mining divisions. HWGB’s share price was unchanged at 6.5 sen yesterday, with some 6.31 million shares traded.