KUALA LUMPUR (July 6): Financially troubled rubber glove maker Careplus Group Bhd (KL:CAREPLS) is selling a property in Seremban for RM42 million, as part of its plan to fund its new energy vehicle venture.
The property comprises 40,680 square metres of land together with a single-storey retail complex with a mezzanine floor, known as Careplus Mall, according to the group in a filing with Bursa Malaysia on Monday.
Careplus said the disposal is expected to generate a pro forma gain of RM2.09 million. The group first acquired the land for RM35.5 million in November 2021. It subsequently incurred a further RM4.29 million in renovation and solar panel installation costs related to the retail complex.
According to the filing, more than 65% of the disposal proceeds, or RM27.31 million, will be used to fund the ongoing construction of the group's new energy vehicle manufacturing and assembly hub in Chembong, Negeri Sembilan. The project is being developed on 73.34 acres of industrial land and carries an estimated construction cost of RM150 million.
Another RM13.36 million of the proceeds has been earmarked for the repayment of borrowings related to the construction of the new energy vehicle manufacturing hub.
Careplus diversified into the electric vehicle business in 2023 to support its core rubber glove manufacturing operations.
As at March 31, Careplus had total borrowings of RM35.45 million, comprising RM20.04 million in long-term borrowings and RM15.41 million in short-term borrowings. The group's borrowings include hire purchase facilities, bank overdrafts, term loans and bills payable.
Careplus expects the disposal to be completed by the end of 2026.
Shares of Careplus closed unchanged at 7.5 sen on Monday, giving the group a market capitalisation of RM59.77 million.