Further details of the Proposed Private Placement are set out in the ensuing sections.

Transcription

1 SCANWOLF CORPORATION BERHAD ( SCANWOLF OR THE COMPANY ) PROPOSED PRIVATE PLACEMENT OF NEW ORDINARY SHARES IN SCANWOLF, REPRESENTING UP TO 10% OF THE TOTAL NUMBER OF ISSUED SHARES OF SCANWOLF (EXCLUDING TREASURY SHARES, IF ANY), AT AN ISSUE PRICE TO BE DETERMINED AND FIXED LATER ( PROPOSED PRIVATE PLACEMENT ) 1. INTRODUCTION On behalf of the Board of Directors of Scanwolf ( Board ), TA Securities Holdings Berhad ( TA Securities ) wishes to announce that the Company proposes to undertake the Proposed Private Placement. Further details of the Proposed Private Placement are set out in the ensuing sections. 2. DETAILS OF THE PROPOSED PRIVATE PLACEMENT 2.1 Size of placement The Proposed Private Placement entails the issuance of up to 8,753,400 new ordinary shares in Scanwolf ( Scanwolf Shares or Shares ) ( Placement Shares ), representing up to 10% of the total number of issued shares of Scanwolf of 87,534,000 Scanwolf Shares as at 20 December 2017 (being the latest practicable date prior to this announcement ( LPD )), after taking into consideration the following: (i) (ii) Scanwolf s existing number of issued shares of 86,753,100 Scanwolf Shares (excluding 780,900 Scanwolf Shares held as treasury shares by the Company ( Treasury Shares )) as at the LPD; and assuming all the Treasury Shares are resold in the open market, prior to the implementation of the Proposed Private Placement (collectively known as Maximum Scenario ). Based on the minimum scenario, the size of the Proposed Private Placement is up to 8,675,300 Placement Shares, representing up to 10% of the existing number of issued shares of Scanwolf of 86,753,100 Scanwolf Shares (excluding the Treasury Shares) as at the LPD, assuming none of the Treasury Shares is resold in the open market prior to the implementation of the Proposed Private Placement ( Minimum Scenario ). The actual number of Placement Shares to be issued pursuant to the Proposed Private Placement will depend on the total number of issued shares of the Company on a date to be determined later, after the approval set out in Section 5 of this announcement has been obtained. 2.2 Placement arrangement The Company intends to place out the Placement Shares to independent third party investors to be identified later other than the following: (i) (ii) (iii) a Director, major shareholder or chief executive of Scanwolf or a holding company of Scanwolf ( Interested Person ); a person connected with an Interested Person; and nominee corporations, unless the names of the ultimate beneficiaries are disclosed. 1

2 In addition, the independent third party investors shall be persons who qualify under Schedules 6 or 7 of the Capital Markets and Services Act, 2007, which include inter-alia, the issuance of the Placement Shares to each of them for a consideration of not less than RM250,000 or the issuance of the Placement Shares is made to high-net worth individuals whose net personal assets exceed RM3,000,000 or corporations with net assets exceeding RM10,000,000. Subject to market conditions and the timing of identification of placees, the Proposed Private Placement may be implemented in 1 or more tranches within 6 months from the date of approval from Bursa Malaysia Securities Berhad ( Bursa Securities ) for the Proposed Private Placement or any extended period as may be approved by Bursa Securities. The implementation of the placement arrangement in multiple tranches would provide flexibility to the Company to procure interested investors to subscribe for the Placement Shares within the period as approved by Bursa Securities. If issued in multiple tranches, the issue price for each tranche of the Placement Shares may be determined separately. The basis of determining the issue price of the Placement Shares will be in accordance with market-based principles. 2.3 Ranking of the Placement Shares The Placement Shares shall, upon allotment and issuance, rank pari passu in all respects with the existing Scanwolf Shares, save and except that the Placement Shares will not be entitled to any dividend, right, allotment and/or other distribution that may be declared, made or paid, the entitlement date of which is prior to the date of allotment and issuance of the Placement Shares. 2.4 Listing of and quotation for the Placement Shares An application will be made to Bursa Securities for the listing of and quotation for the Placement Shares on the Main Market of Bursa Securities. 2.5 Basis of pricing The issue price of the Placement Shares shall be determined and fixed by the Board at a later date ( Price Fixing Date ), after the receipt of Bursa Securities approval for the Proposed Private Placement. The Placement Shares will not be priced at more than 10% discount to the 5-day volume weighted average market price ( 5D-VWAP ) of Scanwolf Shares immediately before the Price Fixing Date. For illustrative purposes in this announcement, the 5D-VWAP of Scanwolf Shares up to and including the LPD is RM per Scanwolf Share. Hence, for the purpose of this announcement, the indicative issue price of the Placement Shares will be RM per Scanwolf Share, representing a discount of approximately RM or 9.38% to the 5D-VWAP of Scanwolf Shares up to and including the LPD. [The rest of this page has been intentionally left blank] 2

3 2.6 Utilisation of proceeds Based on the indicative issue price of RM0.26 per Placement Share, the gross proceeds of up to approximately RM2.28 million from the Proposed Private Placement will be utilised by Scanwolf and its subsidiaries ( Scanwolf Group or the Group ) in the following manner: Utilisation purposes Notes Minimum Scenario Maximum Scenario Expected time frame for the utilisation of proceeds (from the date of listing of the Placement Shares) Working capital (a) 2,136 2,156 Within 6 months Estimated expenses in relation to (b) Within 1 month the Proposed Private Placement Total estimated proceeds 2,256 2,276 (a) On 2 December 2016, Scanwolf Plastic Industries Sdn Bhd, a wholly-owned subsidiary of Scanwolf ( SPISB ), had entered into a joint venture agreement with Nissha Industrial And Trading Malaysia Sdn Bhd, a wholly-owned subsidiary of Tokyo-listed Nissha Printing Co. Ltd ( Nissha ) ( JVA ), for the purpose of carrying out the business of the joint venture company in relation to the production of plastic related goods, in particular the production of luxury vinyl tiles ( LVT ), including LVT related products, calendar moulding related products and construction materials and its related products ( Business ). Under the JVA, SPISB and Nissha agreed to co-operate with each other in a joint-venture for the purpose of carrying out the Business. The Business shall be carried out through Nissha Flooring Industries Sdn Bhd ( NFISB ), the joint venture vehicle in accordance with the terms and subject to the conditions of the JVA. As at the LPD, SPISB has a 34.9% equity interest in NFISB, with a total shareholding of 349,000 ordinary shares in NFISB. Scanwolf Group intends to utilise up to approximately RM2.16 million of the proceeds for the working capital requirements of NFISB s manufacturing business to pay for factory overhead expenses as follows: Note Minimum Scenario Maximum Scenario Factory overhead expenses (i) 2,136 2,156 (i) Factory overhead expenses include costs such as the purchase of equipment and their installation costs, salaries and wages of employees, and other operating expenses of NFISB. (b) The estimated expenses mainly consist of professional fees, placement fees and fees payable to the relevant authorities. Any variation to the actual amount of expenses for the Proposed Private Placement will be adjusted accordingly against the allocation for the working capital of the Group. The actual proceeds to be raised from the Proposed Private Placement are dependent on the final issue price of the Placement Shares and the number of Placement Shares to be issued. Any shortfall/ surplus in the proceeds from the expected amount will be adjusted against the amount allocated for the working capital of the Group. Pending utilisation of the proceeds from the Proposed Private Placement for the abovementioned purposes, the proceeds will be placed in deposits with financial institution or short-term money market instruments as the Board may deem fit. The interest income derived from the deposits with the financial institution or any gain arising from the short-term money market instruments will be used as additional working capital of the Group. 3

4 3. RATIONALE FOR THE PROPOSED PRIVATE PLACEMENT As at 30 June 2017, Scanwolf Group s total trade and other payables stood at approximately RM30.38 million, and total borrowings stood at approximately RM27.48 million of which approximately RM12.69 million is payable within 12 months. As the Group s cash and bank balances of approximately RM1.83 million as at 30 June 2017 to fund its day-to-day working capital requirements are limited, the additional funds to be raised from the Proposed Private Placement are expected to ease the Group s cash flows. After due consideration of the various avenues of fund raising available for the purposes as stated in Section 2.6 of this announcement, the Board is of the view that the Proposed Private Placement is currently an appropriate avenue of fund raising as it enables the Group to raise additional funds expeditiously to meet the working capital requirements of NFISB without incurring additional financing costs as compared to funding via bank borrowings. In addition, the Proposed Private Placement will further strengthen the capital base of the Group. 4. EFFECTS OF THE PROPOSED PRIVATE PLACEMENT 4.1 Share capital The pro forma effects of the Proposed Placement Shares on the share capital of Scanwolf are as follows: Existing share capital as at the LPD (excluding the Treasury Shares) Assuming all the Treasury Shares are resold in the open market To be issued pursuant to the Proposed Private Placement Minimum Scenario Maximum Scenario No. of Shares RM No. of Shares RM 86,753,100 46,887,186 (1) 86,753,100 46,887,186 (1) ,900-86,753,100 46,887,186 87,534,000 46,887,186 8,675,300 (2) 2,255,578 8,753,400 2,275,884 Enlarged share capital 95,428,400 49,142,764 96,287,400 49,163,070 (1) The amount standing to the credit of the Group s and of the Company s share premium account has become part of the Company s share capital. These changes do not have an impact on the number of shares in issue or the related entitlement of any of the shareholders. However, in accordance with the transitional provision of Companies Act 2016 ( Act ), the Company has a period of 24 months from the effective date of the Act to use the existing balances credited in the share premium in a manner as specified by the Act. (2) Being approximately 10% of the existing number of issued shares of Scanwolf of 86,753,100 Scanwolf Shares (excluding the Treasury Shares) as at the LPD. 4.2 Earnings and earnings per Scanwolf Share ( EPS ) The Proposed Private Placement is not expected to have any immediate material effect on the earnings of the Group for the financial year ending 30 June 2018 as the Proposed Private Placement is expected to be completed in the 1 st quarter of 2018 whilst the proceeds to be raised are expected to be utilised within 6 months from the date of listing of the Placement Shares. However, the EPS of the Group shall be correspondingly diluted as a result of the increase in the number of Scanwolf Shares in issue pursuant to the issuance of the Placement Shares. Nevertheless, the Proposed Private Placement is expected to contribute positively to the future earnings of the Group when the benefits of the utilisation of proceeds are realised. 4

5 4.3 Net assets attributable to equity holders of Scanwolf ( NA ) and gearing The pro forma effects of the Proposed Private Placement on the NA and gearing of Scanwolf Group are illustrated below: Minimum Scenario (Audited) (I) After the Proposed As at 30 June 2017 Private Placement (2) RM RM Share capital 46,887,186 (1) 49,142,764 Treasury shares (307,138) (307,138) Property revaluation reserve 4,717,425 4,717,425 Reverse acquisition reserve (19,524,076) (19,524,076) Retained earnings 8,806,884 8,686,884 Shareholders funds / NA 40,580,281 42,715,859 No. of Scanwolf Shares in issue (excluding the 86,753,100 95,428,400 Treasury Shares) NA per Scanwolf Share (RM) Total borrowings (RM) 27,482,205 27,482,205 Gearing (times) (1) The amount standing to the credit of the Group s and of the Company s share premium account has become part of the Company s share capital. These changes do not have an impact on the number of shares in issue or the related entitlement of any of the shareholders. However, in accordance with the transitional provision of the Act, the Company has a period of 24 months from the effective date of the Act to use the existing balances credited in the share premium in a manner as specified by the Act. (2) Based on the indicative issue price of RM0.26 per Placement Share and after deducting the estimated expenses of RM120,000 for the Proposed Private Placement. Maximum Scenario (Audited) (I) After assuming all the Treasury Shares are resold in the open market (2) (II) After (I) and the Proposed Private Placement (3) As at 30 June 2017 RM RM RM Share capital 46,887,186 (1) 46,887,186 49,163,070 Treasury shares (307,138) - - Property revaluation reserve 4,717,425 4,717,425 4,717,425 Reverse acquisition reserve (19,524,076) (19,524,076) (19,524,076) Retained earnings 8,806,884 8,806,884 8,686,884 Shareholders funds / NA 40,580,281 40,887,419 43,043,303 No. of Scanwolf Shares in issue 86,753,100 87,534,000 96,287,400 (excluding the Treasury Shares) NA per Scanwolf Share (RM) Total borrowings (RM) 27,482,205 27,482,205 27,482,205 Gearing (times)

6 (1) The amount standing to the credit of the Group s and of the Company s share premium account has become part of the Company s share capital. These changes do not have an impact on the number of shares in issue or the related entitlement of any of the shareholders. However, in accordance with the transitional provision of the Act, the Company has a period of 24 months from the effective date of the Act to use the existing balances credited in the share premium in a manner as specified by the Act. (2) Assuming all 780,900 Treasury Shares are sold at cost. (3) Based on the indicative issue price of RM0.26 per Placement Share and after deducting the estimated expenses of RM120,000 for the Proposed Private Placement. 4.4 Substantial shareholders shareholdings The pro forma effects of the Proposed Private Placement on the substantial shareholders shareholdings in the Company as at the LPD are set out as follows: Minimum Scenario (I) As at the LPD After the Proposed Private Placement Direct Indirect Direct Indirect No. of Shares % (1) No. of Shares % (1) No. of Shares % (1) No. of Shares % (1) Cedric Wong King Ti 7,000, ,000, Dato Loo Bin Keong 9,723, ,000 (2) ,723, ,000 (2) 0.03 Yii Long Ging 8,200, ,200, Dato Lai Kok Heng 6,865, ,865, (1) The total number of issued shares of Scanwolf excludes the Treasury Shares. (2) Deemed interested by virtue of the Scanwolf Shares held by his son, Loo Run Wei, in the Company. 6

7 Maximum Scenario (I) After assuming all the Treasury Shares are resold in the As at the LPD open market Direct Indirect Direct Indirect No. of Shares % (1) No. of Shares % (1) No. of Shares % No. of Shares % Cedric Wong King Ti 7,000, ,000, Dato Loo Bin Keong 9,723, ,000 (2) ,723, ,000 (2) 0.03 Yii Long Ging 8,200, ,200, Dato Lai Kok Heng 6,865, ,865, (II) After (I) and the Proposed Private Placement Direct Indirect No. of Shares % No. of Shares % Cedric Wong King Ti 7,000, Dato Loo Bin Keong 9,723, ,000 (2) 0.03 Yii Long Ging 8,200, Dato Lai Kok Heng 6,865, (1) The total number of issued shares of Scanwolf excludes the Treasury Shares. (2) Deemed interested by virtue of the Scanwolf Shares held by his son, Loo Run Wei, in the Company. [The rest of this page has been intentionally left blank] 7

8 4.5 Convertible securities As at the LPD, there are no options, warrants, convertible securities and uncalled capital issued by the Company. 5. APPROVALS REQUIRED The Proposed Private Placement is subject and conditional upon the approval being obtained from Bursa Securities for the listing of and quotation for the Placement Shares on the Main Market of Bursa Securities. Scanwolf has obtained the approvals of its shareholders at the 11 th Annual General Meeting ( AGM ) convened on 28 November 2017 and all the resolutions set out in the notice of AGM were duly passed. Subject always to the Act, the Constitution of the Company and the approvals of the relevant governmental and regulatory authorities, the Directors were empowered, pursuant to Section 75 and Section 76 of the Act, to issue shares in the Company at any time and upon such terms and conditions for such purposes as the Directors may, in their absolute discretion, deem fit, provided that the aggregate number of shares issued pursuant to the resolution does not exceed 10% of the issued capital of the Company for the time being and that the Directors be and are also empowered to obtain the approval for the listing of and quotation for additional shares so issued on Bursa Securities and that such authority shall continue in force until the conclusion of the next AGM of the Company. 6. DIRECTORS AND MAJOR SHAREHOLDERS INTERESTS None of the Directors, major shareholders and/or persons connected with them has any interest, direct and indirect, in the Proposed Private Placement in view of the fact that the Placement Shares will not be placed to them as mentioned in Section 2.2 of this announcement. 7. DIRECTORS STATEMENT The Board, after having considered all aspects of the Proposed Private Placement, is of the opinion that the Proposed Private Placement is in the best interest of the Company. 8. ESTIMATED TIME FRAME FOR COMPLETION Barring any unforeseen circumstances and subject to the approval from Bursa Securities being obtained, the Board expects the Proposed Private Placement to be completed within 6 months from the date of approval from Bursa Securities. [The rest of this page has been intentionally left blank] 8

9 9. ADDITIONAL INFORMATION 9.1 Commentary on the financial performance and financial position of Scanwolf Group The summary of the financial information of the Group for the past 3 audited financial years/ period as well as the 3-month financial periods ended 30 September 2016 and 30 September 2017 is as follows: (Audited) (Unaudited) 15-month financial period ended ( FPE ) 30 June 2015 (1) Financial year ended ( FYE ) 30 June 2016 FYE 30 June month FPE 30 September month FPE 30 September 2017 Revenue 64,299 53,329 62,386 11,359 17,840 Profit/ (Loss) after tax attributable (4,596) (2,054) (2,104) (874) 1,400 to owners of the Company ( PAT / LAT ) Shareholders funds / NA 43,042 40,987 40,580 40,113 41,980 Share capital 43,767 43,767 46,887 43,767 46,887 Weighted average number of 79,880 86,753 86,753 86,753 86,753 Shares in issue (excluding the Treasury Shares) ( 000) Number of Shares in issue 86,753 86,753 86,753 86,753 86,753 (excluding the Treasury Shares) ( 000) NA per Share (RM) Basic EPS / (loss) per Share (5.75) (2.37) (2.43) (1.01) 1.61 ( LPS ) (sen) (2) Diluted EPS / LPS (sen) (5.75) (2.37) (2.43) (1.01) 1.61 (1) Scanwolf changed its financial year end from 31 March to 30 June. (2) Based on the weighted average number of Scanwolf Shares. (i) 3-month FPE 30 September 2017 vs 3-month FPE 30 September 2016 Scanwolf Group s revenue for the 3-month FPE 30 September 2017 increased by 57.06% to approximately RM17.84 million (3-month FPE 30 September 2016: RM11.36 million). The increase in revenue for the 3-month FPE 30 September 2017 was mainly due to the increase of revenue in the property division to approximately RM8.47 million (3-month FPE 30 September 2016: RM2.51 million). The increased revenue was mainly due to higher sales recognised from the progress of the Kampar Putra project in Kampar, Perak, arising from the sales of the commercial suites. In line with the increased revenue, Scanwolf Group enjoyed a PAT of RM1.40 million for the 3-month FPE 30 September 2017 (3-month FPE 30 September 2016: LAT of RM0.87 million). The PAT recorded was mainly due to higher sales recognised in the Group s property division as mentioned above. 9

10 (ii) FYE 30 June 2017 vs FYE 30 June 2016 Scanwolf Group s revenue for the FYE 30 June 2017 increased by 16.98% to approximately RM62.39 million (FYE 30 June 2016: RM53.33 million). The increase in revenue for the FYE 30 June 2017 was mainly due to the increase of revenue in the manufacturing division to approximately RM37.64 million (FYE 30 June 2016: RM34.27 million) and property division to approximately RM24.74 million (FYE 30 June 2015: RM19.06 million). The revenue growth was in line with the Company s continuing efforts in enhancing its product offering to both local and overseas markets for the manufacturing division, which include manufacturing new products for the furniture market segment. As for the property division, higher sales were recognised from the progress of the Kampar Putra project in Kampar, Perak, arising from the sales of the commercial suites. Despite the increase in revenue, Scanwolf Group suffered a LAT of approximately RM2.10 million for the FYE 30 June 2017 (FYE 30 June 2016: RM2.05 million). The LAT incurred was mainly due to: (a) (b) (c) the disposal of land held for property development of approximately RM1.67 million in the FYE 30 June 2017 (FYE 30 June 2016: nil); the property, plant and equipment written off of approximately RM1.27 million in the FYE 30 June 2017 (FYE 30 June 2016: nil) as the Group has carried out an annual impairment review on the property, plant and equipment and has identified impairment loss on its idle plant and machineries that were not generating revenue to the Group; and the impairment loss recognised on receivables of approximately RM0.74 million in the FYE 30 June 2017 (FYE 30 June 2016: RM0.59 million) due to few overseas customers defaulted in payments. (iii) FYE 30 June 2016 vs 15-month FPE 30 June 2015 Scanwolf Group s revenue for the FYE 30 June 2016 decreased by 17.06% to approximately RM53.33 million (15-month FPE 30 June 2015: RM64.30 million). The decrease in revenue for the FYE 30 June 2016 was mainly due to the change in financial year end, resulting in the Group recorded a revenue of 15 months for the 15-month FPE 30 June 2015 and only 12 months for the FYE 30 June For the FYE 30 June 2016, the Group recorded a revenue of RM34.27 million for the manufacturing division (15-month FPE 30 June 2015: RM41.66 million) and RM19.06 million (15-month FPE 30 June 2015: RM22.64 million) for the property division. Despite the decrease in revenue, the LAT suffered by the Group decreased to approximately RM2.05 million for the FYE 30 June 2016 (15-month FPE 30 June 2015: RM4.60 million). The LAT incurred was mainly due to: (a) (b) the impairment of land held for property development of approximately RM3.12 million in the FYE 30 June 2016 (15-month FPE 30 June 2015: nil) as the sales consideration of the disposed land is lower than its costs pending the completion of the disposal; and provision for liquidated and ascertained damages of approximately RM0.64 million in the FYE 30 June 2016 (15-month FPE 30 June 2015: nil) because of the delay in delivery of vacant possession of residential units to the buyers. 10

11 9.2 Impact of the Proposed Private Placement and value creation to Scanwolf Group and its shareholders The Proposed Private Placement will enable Scanwolf Group to raise funds without incurring additional interest costs as compared to bank borrowings for the purposes set out in Section 2.6 of this announcement. These are expected to have a positive impact on the Group s earnings and will enhance its shareholders value. In view of the above, despite the dilution of EPS of the Group and dilutive effect on the existing shareholders shareholdings in Scanwolf, the Propose Private Placement is expected to have a positive impact on the earnings of the Group when the benefits are realised, which will then directly enhance its shareholders value. 9.3 Adequacy of the Proposed Private Placement in addressing the Company s financial concerns In view of the low cash and bank balances of Scanwolf Group and to meet its working capital requirements such as payments for its trade and other payables, short-term borrowings and staff costs, the Group requires to keep its existing cash flows to support its existing operations for the next 12 months. With the availability of proceeds from the Proposed Private Placement, Scanwolf Group will be able to fund the working capital requirements of NFISB as stated in Section 2.6 of this announcement. In addition, the Business from the JVA is expected to provide an additional stream of revenue to the Group. The Board expects that this would in turn enhance the Group s financial performance. Premised on the above, the Board is of the view that the Proposed Private Placement would be sufficient in addressing the Group s current financial concern. 9.4 Steps taken by Scanwolf Group to improve its financial position Scanwolf Group is principally involved in the manufacturing of plastics extrusion products, as well as property development. The Group has been facing challenges in its manufacturing business such as volatility in exchange rates, raw material prices, manage rising labour and utility costs, which all affects its competitiveness, while its property division has been greatly impacted by the overall slowdown of the property market in Malaysia. Taking cognisance of these, the Group has made efforts to improve its financial performance and strengthen its financial position by undertaking the following plans: (i) the Group will continue to invest heavily in products and process innovation such as researching and developing ways to maximise the production output and quality of their products (i.e. investing in new machineries to integrate with the existing machineries to improve production capacity), which will enable them to seamlessly react to any changes to their product mix, in terms of local and global consumption and demand. As at the date of LPD, the Group is securing a significant consistent order from an oversea customer for production of building materials. Furthermore, our Group is in the midst of launching two innovation plastic products for furniture and residential industry for both local and export markets. Currently, these products are in their final testing stage and are expected to be launched in the 1 st quarter of 2018; (ii) SPISB had on 2 December 2016 entered into the JVA with Nissha to produce plastics goods, namely LVT and related products. In the long term, Scanwolf will be able to benefit from the technology transfer from Nissha and expand its business in the plastics and related products internationally, while providing a new and consistent source of revenue to the Group. The JVA is expected to be completed within 3 months; and 11

12 (iii) for the Group s property development business, the Group is currently in phase 2 of development for the Kampar Putra project, where a total of 600 units of commercial suites is under construction in Kampar, Perak. The Kampar Putra project, with a total gross development value of RM317 million over 7 years ending in year 2024, is a mix development project in Kampar, Perak, consisting 600 units of commercial suites, 276 units of townhouses, 2 blocks of apartments and a hotel. The said project is 8% completed as at 30 June The Group expects the property division s revenue and profit to be driven by the sales of commercial suites of the Kampar Putra project after completion in the 1 st quarter in The Board will continue to increase productivity by giving high importance to efficiency in its operations and also aggressively seek new business opportunities present in the market place either locally or abroad, from within its core businesses or other business sectors, to enhance its revenue and profitability. The Board believes that increase in production capacity to achieve better economies of scale as well as further improvement in quality, cost control, efficiency and product mix across its plastics and property development businesses will enhance the Group s profitability and returns on shareholders funds. In view of the steps undertaken as mentioned above, the Board is of the opinion that the Group s strategies to obtain more projects and streamline its business operations is expected to improve the financial position of the group. 10. ADVISER AND PLACEMENT AGENT TA Securities has been appointed as the Adviser and Placement Agent in relation to the Proposed Private Placement. 11. APPLICATION TO THE RELEVANT AUTHORITIES The application to Bursa Securities in respect of the Proposed Private Placement is expected to be submitted within 1 month from the date of this announcement. This announcement is dated 21 December