[ad_1]
KUALA LUMPUR (October 13): Healthcare and medical equipment provider LKL International Bhd today obtained shareholder approval at an extraordinary general meeting (EGM) to undertake a private placement and employee stock option (ESOS) plan.
The proposed private placement on July 17, 2020 involves the issuance of up to 85.8 million placement shares for an amount not exceeding 20% of the total issued ordinary shares at an indicative price of RM1.10 per share.
In a statement today, LKL said that with up to RM94.3 million projected to be raised, the group plans to allocate RM26.5 million for capital expenditures (capex) and expansion plans.
He said most of the capex is for the RM13 million purchase and installation of two units of adjoining new factory buildings near the group’s current headquarters and manufacturing facilities.
LKL said that the new factory buildings will be used for the manufacture and assembly of beds, peripherals and medical / sanitary accessories, and as a production office and warehouse for finished products.
In addition, LKL said that it would invest RM9.5 million of the proceeds to build a three-story steel frame extension in the existing factory buildings and install a conveyor line to automate its epoxy powder coating process.
Another RM4 million of capex would be used to purchase a variety of new machinery.
LKL Managing Director Lim Kon Lian said Covid-19 had increased the urgency for healthcare providers to increase their capabilities and better match their capabilities.
“In line with this, we are currently witnessing a greater demand for medical beds from hospitals and medical centers, with orders on hand for more than 750 beds to be delivered over the next 14 months.
“With strong demand within the healthcare sector expected to persist, our investment and expansion plans are timely to enhance manufacturing capabilities and capabilities to meet this uptrend.
“The proposed private placement would help us quickly and profitably raise funds to finance our manufacturing capital expenditure.
“Additionally, the earnings would also enhance the liquidity and financial flexibility of the company, and strengthen our overall financial position through expanded working capital to support our growth,” he said.
At the EGM, LKL also obtained shareholder approval for the proposed ESOS announced on July 17, 2020, which encompasses the issuance of up to 15% of the expanded total number of issued ordinary shares and privately placed shares.
The firm said the ESOS would take place and be completed once the private placement exercise is expected to be completed in the first half of 2021.
As of 12pm today, LKL was up 1.92% or two sen to RM1.06, valuing the stock at RM454.53 million.
[ad_2]
