KUALA LUMPUR (Feb 9): Tex Cycle Technology (M) Bhd has subscribed for RM10 million in nominal value of perpetual medium-term notes (MTNs) issued by Chin Hin Group Bhd.

In its announcement to Bursa Malaysia on Friday, Tex Cycle said the perpetual MTNs are offering a higher return of 7.5% per annum and provide a steady and predictable income stream for the group, as they pay regular interest payments until the redemption of the MTNs.

Tex Cycle noted that it has been actively involved in unit trust investment, which offers an average return of 2.51% to 7.09% per annum in the past years.

“The subscription moneys will be satisfied entirely in cash, which will be funded through internally generated funds,” said Tex Cycle.

In a separate filing, Chin Hin said it made the second issuance of the perpetual MTNs of RM10 million on Friday. This issuance is part of the RM500 million perpetual MTN programme.

Proceeds from this issuance will be allocated for Chin Hin’s capital expenditures, refinancing existing and future financing, working capital needs, and covering costs and expenses associated with the programme.

AmInvestment Bank Bhd is the principal adviser, lead arranger, lead manager and facility agent for the perpetual MTN programme.

In May 2023, Tex Cycle's executive chairman Keh Chuan Seng and executive director Lee Hai Peng emerged as the group’s substantial shareholders.

Keh, who is also the executive chairman of K Seng Seng Corp Bhd, acquired a 26.43% stake in Tex Cycle through his property firm Frazel Group Sdn Bhd. Meanwhile, Lee, the former executive director of Chin Hin, bought a 5.13% stake.

Both purchased their shares from the previous major shareholder, Can Cycle Sdn Bhd, which sold its entire 31.56% stake.

Shares of Tex Cycle were one sen or 1.44% higher to close at 70.5 sen on Friday, valuing the group at RM179.32 million. Chin Hin closed three sen or 0.79% higher at RM3.82, giving it a market capitalisation of RM6.76 billion.