A-Rank to venture into property development, plans two-for-five bonus issue

TheEdge Fri, Nov 09, 2018 10:14am - 5 years View Original


KUALA LUMPUR: A-Rank Bhd plans to diversify into property development in view of intense competition in its existing aluminium business.

The group said while there is no assurance the proposed move will be commercially viable, it intends to identify a joint-venture partner with extensive experience as a property developer for its initial investment to reduce such risks.

In a filing to Bursa Malaysia yesterday, A-Rank said the property development business may contribute 25% or more to its net profit, therefore enhancing the group’s prospect moving forward.

It will also result in the diversion of 25% or more of the net assets of the group.

“While we believe that the existing business of the group is stable, it is increasingly competitive and subject to the volatility of its raw materials price, ie aluminium prices as well as fluctuation in foreign exchange rates, particularly US dollar vis-à-vis the ringgit.

“The board has identified property development as an opportunity as the group does not wish to enter into any aluminium-related business so as not to be seen to compete with our customers. The group also do not have any experience in any other businesses not related to aluminium,” A-Rank said.

Currently, A-Rank is involved in manufacturing and marketing of aluminium billets. Its products are sold to aluminium extrusion manufacturers as their raw materials and are used in many industries including construction, transportation and consumer goods.

The group currently does not have any land bank for the purpose of property development.

The company is also proposing a two-for-five bonus issue of up to 51.45 million new shares. The entitlement date will be determined later.

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