KUALA LUMPUR (May 22): Sarawak Consolidated Industries Bhd (KL:SCIB) has aborted a proposed rights issue following the completion of the disposal of its manufacturing arm for RM113 million.
In a filing with Bursa Malaysia on Friday, the group said it has completed the disposal of its wholly owned unit SCIB Concrete Manufacturing Sdn Bhd (SCM) to YTL Cement (Sarawak) Sdn Bhd, an indirect subsidiary of YTL Corp Bhd (KL:YTL).
With SCM ceasing to be part of the group, SCIB said the intended use of proceeds from the rights issue — mainly for the manufacturing business of SCM — is no longer relevant. As such, the group will not proceed with the exercise.
SCIB had proposed the rights issue, on the basis of one new share and one warrant for every one share held, on June 26 last year.
The proceeds of up to RM53.45 million were earmarked for the construction of a new factory, purchase of machinery and repayment of bank borrowings.
On Friday, SCIB said the disposal of SCM is part of its strategy to unlock value from the manufacturing business and refocus resources on its remaining construction and engineering, procurement, construction and commissioning (EPCC) activities.
The group said it will reassess its operating structure and funding requirements and may consider a revised rights issue with warrants at a later date, subject to a fresh application to Bursa Malaysia Securities.
“Our priority is to ensure that any future capital exercise is properly aligned with SCIB’s operational needs, financial position and long-term strategic direction,” executive chairman Datuk Chong Loong Men said in a statement.
He added that the disposal would allow the group to unlock value from its manufacturing business and land bank, while strengthening its financial position to pursue larger and more sustainable opportunities in the construction and EPCC space.
Separately, SCIB also announced the appointment of Ben Huang Vui Bing as its new chief operating officer.
Huang, 38, has more than 13 years of experience in civil and structural engineering, project execution and construction management. The company said he will play a key role in overseeing operational execution, project delivery and construction management capabilities.
SCIB shares fell half a sen, or 4%, to 12 sen on Friday, giving the group a market capitalisation of RM88.5 million.