CN Asia seeks to ratify diversification to include moneylending business

TheEdge Tue, Apr 26, 2022 10:50pm - 1 year View Original


KUALA LUMPUR (April 26): Steel storage tank maker CN Asia Corp Bhd has proposed to ratify the diversification of the group's business to include moneylending business.

It is proposing to seek shareholders' approval for the ratification at an extraordinary general meeting to be convened.

According to CN Asia, it had on April 15, 2021 acquired Southborn Capital Sdn Bhd from Ing Chu Yeong for RM160,000 cash. Southborn Capital holds a moneylender's licence issued by the Ministry of Housing and Local Government under the Moneylenders Act 1951.

"The moneylending segment contributed a net profit of RM70,000 compared with the manufacturing segment, which incurred a net loss of RM1.53 million for the financial year ended Dec 31, 2021 (FY21). As at end-March 2022, the group had provided a total loan amount of RM20 million to six corporations which are involved in a variety of businesses such as manufacturing, logistics, property development and construction," it said in a bourse filing on Tuesday (April 26).

"Due to the demand for the moneylending services, approximately RM16.13 million or 29.61% of the group's net assets (NA) were diverted for the group's moneylending business during FY21.

"In view of the diversion of more than 25% of the group's NA to the moneylending business coupled with the profit contribution of the moneylending segment as compared to the loss-making position of the group's existing manufacturing segment during FY21, CN Asia wishes to seek its shareholders' approval for the proposed ratification," it added.

Notwithstanding the diversification, CN Asia said it remains committed to its existing businesses in manufacturing of tanks and related products as well as engineering and fabrication works.

Barring any unforeseen circumstances, it expects the proposed ratification to be completed in the second quarter of 2022.

CN Asia shares closed unchanged at 36.5 sen on Tuesday, bringing it a market capitalisation of RM64.35 million.

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