Tien Wah to acquire factory in Dubai for AED11m
15 Jun 2016, 08:43 pm
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KUALA LUMPUR (June 15): Tien Wah Press Holdings Bhd, which has aborted its RM6 million acquisition plan to acquire an existing facility in Jafza, United Arab Emirates, will be acquiring a factory cum office building that costs twice more.

"After further deliberation, the Board has decided not to carry on with its plans for the Existing Facility," it told stock exchange in a filing today.

Instead, the rotogravure printing and photolithography printing specialist said it has entered into another sales and purchase agreement with an unspecified vendor on May 19, which will see it acquire a factory cum office building with a total build-up area of 3,799-sq metres, for AED11 million (RM12.22 million).

"Upon completion of the SPA, our unit Alliance Print Technologies FZE (APTF) will enter into a land lease agreement with Jebel Ali Free Zone FZE for the lease of a piece of 6,404 sq m land in Jafza, on which the Dubai Facility is erected on," it added.

It targets the acquisition of the Dubai Facility to be completed by the third quarter of 2016.

Tien Wah said it will invest RM10 million to construct a new facility, as well as purchase of furniture and fittings.

It said APTF has entered into a 15-year land lease agreement with Jebel Ali Free Zone FZE on March 20, for the lease of a piece of 9,282-sq metre land in Jafza.

"We target the construction of new facility to commence in the third quarter of 2016, estimated to be completed by the third quarter of 2017," it said, adding any shortfall for the costs of construction shall be funded by internally-generated funds and/or bank borrowings.

Recall that Tien Wah had in February announced the rights issue to raise RM48.25 million, mainly for its business expansion plan and construction of a new factory.  The company has earmarked RM21 million raised from its rights issue, for business expansion in the Middle East.

It said in the filing then that it intends to expand into the Middle East region and/or Indonesia, by establishing print packaging production facilities in these countries, and/or acquiring businesses/companies which are involved in operations similar to the group.

Hence, it has allocated RM30 million or 62.2% of the total amount to be raised for the above purpose.

Shares in Tien Wah Press gained one sen or 0.48% to close at RM2.11 today, for a market capitalisation of RM203.6 million.

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