Ho Wah Genting to raise RM31.5 million via issue of ICPS

KUALA LUMPUR (June 10): Ho Wah Genting Bhd (HWG), which is not a glove maker but whose share price has climbed as much as the glove stocks, intends to raise RM31.5 million fresh capital through a placement of up to 63.39 million irredeemable convertible preference shares (ICPS) to selected investors.

In addition, HWG entered into two settlement agreements with its creditors to settle the outstanding sums via the issuance of 40.25 million settlement shares at a price of 49.7 sen per share, which represents a 5% discount to its five-day VWAP.

The fund-raising exercise comes after the company’s share price has rocketed over 600% from the low of 7.5 sen in mid-March to 54 sen today.

In a filing today, loss-making HWG announced that part of the money raised is meant for its healthcare related business which is its latest venture to jump onto the pandemic bandwagon.

According to the filing, the company had entered into 15 separate subscription agreements with its substantial shareholder Ho Wah Genting Sdn Bhd and 14 other investors for the subscription at a set issue price of 49.7 sen per ICPS, which represents a 5% discount to the 5-day volume weighted average market price (VWAP) of 52.3 sen.

From the RM31.5 million raised proceeds, HWG said it intends to utilise up to RM23.2 million of the proceeds as working capital for its existing healthcare projects and will also serve as standby funds for the company to fund its future healthcare related projects or investment.

“The company had on March 25, 2020 announced that it proposes to undertake the proposed diversification of its existing businesses into the healthcare-related industry which includes (but is not limited to) the health supplement, biotechnology and healthcare technology sub-segments,” HWG said.

Meanwhile it intends to utilise RM8 million for general working capital, as well as another RM300,000 for the expenses of the proposal.

HWG, which has been searching for a core income generative business, is currently awaiting MoH approval for its test kit to be distributed in Malaysia. It also wants to distribute China-developed COVID-19 diagnostic kits.

The company also announced that its subsidiary HWG Consortium Sdn Bhd was appointed as a distributor by Shanghai Liangrun Biomedicine Technology Co Ltd.

Both placements are expected to be completed within six months, the group said.