Ruiqiang Group (08427) announced that on May 2, 2024, the buyer Target Preca...
Zhitong Financial App News, Ruiqiang Group (08427) issued an announcement. On May 2, 2024, the buyer Target Prest Industries Sdn. Bhd. (a wholly-owned subsidiary of the company) and seller KLE Products SDN. BHD entered into a sales agreement. The buyer agreed to purchase the land use rights for the plot at a cost of RM7.9523 million, and the seller agreed to sell the aforementioned land use rights.
The plot is No. 19, Jalan Perusahaan 1, Kawasan Perusahaan Beranang, 43700 Beranang, Selangor Darul Ehsan, Malaysia. The land use rights area is approximately 13,203 square meters. The land use rights for this plot were approved for industrial use for a period of 99 years, expiring on October 9, 2099.
The company's shares were listed on GEM on July 19, 2017 (date of listing) through public sale and placement (collectively referred to as share offering). The net proceeds (after deducting underwriting commissions and other expenses) from the sale of shares by the company are approximately HK$29.6 million.
For the period ended November 30, 2023, the net proceeds from the listing were not fully utilized in accordance with the anticipated schedule set out in the “Future Plans and Use of Proceeds” section of the Group's Prospectus (Prospectus) dated July 6, 2017.
According to the announcement, the board of directors believes that the acquisition provides an opportunity for the Group to acquire land in Malaysia to develop a self-used plant to manufacture precast concrete junction boxes and promote trade in accessories. The company is currently leasing a factory in Selangor, Malaysia, and the rental cost is approximately RM504,000 per year. In addition, the plot of the existing plant is about 8093 square meters, which is less than the land use rights of this plot about 13,230 square meters. The larger area will enable the Group to increase production capacity by expanding its production line. After considering the cost of acquiring the land and developing the plant on its own, the board of directors believes that after the development is completed, the benefits and long-term rent savings of owning the plant are greater than the capital expenses related to the acquisition and self-developed plant on the site mentioned above. The acquisition will be fully funded by the Group's internal resources (that is, part of the unused proceeds (after reallocation)).