KUALA LUMPUR: George Kent (Malaysia) Bhd (GKent) is branching out into glove manufacturing after agreeing to buy a major stake in Dynacare Sdn Bhd.
GKent today said it was offered by Johan Holdings Bhd to buy a 40 per cent stake in its wholly-owned Dynacare.
In a filing to Bursa Malaysia today, the company said the stake was at an issue price of RM1 per share.
The intended equity to be contributed by Dynacare shareholders was RM100 million, GKent added.
"In view of the historical financial performance and trends, the board has decided to embark on the proposed subscription, allowing the group to enter into the glove business and create an additional income stream to the group," it said.
GKent also said it had proposed the right to execute works from Dynacare to build a glove manufacturing plant.
The project wil be undertaken within 24 months or more for a contract sum of RM624.1 million.
The company also proposed a diversification of its existing business activities to include the glove business, pharmaceutical and medical products and devices and services as well as related upstream and downstream activities.
GKent is principally involved in two main business segments namely engineering and metering.
GKent said the stake acquisition would be funded via internally-generated funds and/or bank borrowings.
"For shareholders' information purposes, the cash and bank balances of GKent stood at RM201.12 million as at the latest unaudited 12-month financial period ended January 31, 2021.
"The board anticipates that, barring any unforeseen circumstances, the group's new business activities in the glove business may contribute 25 per cent or more of the net profits of the group and/or result in a diversion of more than 25 per cent of the net asset of the group towards the aforesaid new business activities moving forward," it added.