Oceancash to raise cash via share placement for expansion into PPE production

PETALING JAYA: Oceancash Pacific Bhd has entered into a conditional subscription with Macquarie Bank Ltd for the proposed allotment and issuance of up to 24.5 million shares to raise capital for its expansion of production of nonwoven materials used in the production of personal protective equipment (PPE).

In its Bursa disclosure, the group’s proposed placement shares represents about 10% of its total share capital to raise an estimated RM21.2 million based on an indicative issue price of 86.6 sen.

It revealed that RM17.9 million of the proceeds has been earmarked for the purchase of machinery, RM3 million has been set aside as working capital and the remaining proceeds will be used to defray the expenses relating to the exercise.

In total, Oceancash estimated the PPE expansion capex to be RM40 million, inclusive of land and machinery which will be executed upon funding through internal funds, private placement and bank borrowings.

The expansion is estimated to double its capacity to 16,000 tonnes per annum from its present capacity of 8,000 tonnes per annum with an estimated completion time of less than 18 months.

The group’s general manager Lor Seng Thee commented that the group has observed an accelerated demand for nonwoven materials this Covid-19 pandemic as it is the key raw material used in the production of PPE and believes its an opportune time for such expansion.

“We are confident that this plan will mark a new major milestone for the group with very strong potential to raise the growth trajectory of our earnings,” he said in a press release.

Lor also pointed out that the material produced by its new plants could also be funneled to the disposable hygienic products industry, in which Oceancash already has a steady customer base.

“We believe the demand for hygiene products will continue to grow, given the improvement of standard of living as well as the higher hygiene awareness arising from this pandemic.”

source https://www.thesundaily.my/business/oceancash-to-raise-cash-via-share-placement-for-expansion-into-ppe-production-FH3786153