KUALA LUMPUR (June 30): Technical rubber compound provider GIIB Holdings Bhd,  formerly known as Goodway Integrated Industries Bhd, has received its shareholders’ nod to diversify its business to include manufacturing of gloves and raise up to RM65.33 million via a rights issue with warrants.

This was achieved at its extraordinary general meeting held today.

With the approval, GIIB will install five double former glove-dipping production lines at its existing warehouse in Nilai, Negeri Sembilan. The lines are estimated to have an annual production capacity of 1.05 billion pieces of gloves.

The production lines are interchangeable to produce latex or nitrile gloves. The conversion of the existing warehouse is expected to be completed by next month.

The first production line is expected to commence production in November, with all five production lines to be fully operational by February next year.

To fund this diversification, GIIB will undertake a one-for-one renounceable rights issue of up to 362.94 million new shares, together with up to 362.94 million free warrants on the basis of one warrant for every one rights share subscribed.

The proposed exercise is expected to raise gross proceeds of up to RM65.33 million based on the indicative issue price of 18 sen per rights share excluding proceeds from the exercise of the warrants. The entitlement to the rights issue and free warrants will be determined on a book closure date to be announced later.

As a sign of confidence towards this proposed rights issue exercise, the substantial shareholders of the group — namely GIIB chief executive officer and executive chairman Tai Boon Wee, executive directors Tai Qisheng, Alison Wong Ping Kiong and Wong Huo Siing — had provided their respective irrevocable undertakings to subscribe for the rights issue with warrants to meet the minimum level of funds required.

“With the approvals of the proposals, the management will now fully focus on streamlining our business and work hard to build and strengthen the new business segment," Boon Wee said in a statement today.

"We are cautiously optimistic that we will raise sufficient funds from the rights issue and believe the gloves business will become a new major income stream for the group in the future, supported by the positive outlook for the glove industry and strong back-log orders.”

In terms of its compounding segment, Boon Wee said the group will continue to focus on the cost efficiency and optimise on the usage of raw materials to create value for its shareholders. The compounding segment accounted for 69.4% of the group's total revenue of RM36.91 million in the 18 months period ended Dec 31, 2020.

GIIB shares closed down 2 sen or 6.9% at 27 sen today, bringing it a market capitalisation of RM99.74 million.