KUALA LUMPUR (Sept 29): Careplus Group Bhd (KL:CAREPLS) plans to raise up to RM29.78 million through a rights issue to help fund the ongoing construction of the group's energy vehicle manufacturing hub in Chembong, Negeri Sembilan.

This marks the cash-strapped group's second attempt to raise funds via a rights issue to finance the construction of the hub. The first attempt to raise RM55 million last year did not materialise after its share prices fell below the intended issue price.

In a bourse filing on Tuesday, Careplus said part of the funds raised will be used for the expansion of its automotive dealership business and for working capital requirements.

The rights issue involves the issuance of up to 425.4 million new shares at seven sen each on the basis of one rights share for every two existing shares held at an entitlement date to be fixed, the group said.

At full subscription, the rights issue will enlarge Careplus’ share base by 50.4% to 1.28 billion shares from 850.79 million shares currently. The issue price represents an 11.39% discount to the theoretical ex-rights price of 7.9 sen, which was derived from the five-day volume-weighted average price of 8.35 sen up to Sept 25.

Upon completion of the rights issue, the group’s gearing ratio would improve to 0.12 times from 0.14 times as at June 31, 2025.

At the same time, the group’s substantial shareholders — Lim Kwee Shyan, the CEO and his wife Ng Shu Si — will not see any significant change in their shareholding percentage.

The rights issue is subject to the approval of relevant authorities and shareholders, and is expected to be completed by the first quarter of 2027.

UOB Kay Hian (M) Sdn Bhd has been appointed as the principal adviser for the exercise.

In June, Careplus also announced that it is selling a property in Seremban for RM42 million as part of its plan to fund the energy vehicle venture.

Careplus diversified into the energy vehicle business through a 51:49 partnership with GoAuto Group Sdn Bhd to support its core rubber glove manufacturing operation. The project is being developed on 73.34 acres of industrial land and carries an estimated construction cost of RM150 million.

For the fourth quarter ended June 30, 2026, Careplus’ net loss narrowed to RM6.5 million from RM59.11 million a year earlier while revenue rose 54.3% to RM28.78 million from RM18.66 million thanks to higher revenue contribution from the new energy vehicle division.

As at end-June, the group has cash and bank balances of RM6.2 million against RM31.6 million of borrowings. The group's borrowings include hire purchase facilities, bank overdrafts, term loans and bills payable.

Careplus shares closed half a sen or 6.25% higher at 8.5 sen on Tuesday, giving a market capitalisation of RM72.3 million. The counter has declined by 15% over the past one year.