EONMETALL Group Bhd plans to invest RM51 mil in a 51% stake in Lienteh Technology Sdn Bhd (LTSB), which is expected to begin its nitrile glove manufacturing operation next month.
The steel product manufacturer yesterday inked a a memorandum of understanding (MoU) with LTSB’s shareholders to negotiate the terms and conditions of the proposed acquisition of the stake.
In a filing with Bursa Malaysia yesterday, it said the proposed investment would enable the company and its subsidiaries to partner with LTSB’s shareholders to tap into a new market segment, the manufacture as well as sale and distribution of gloves.
“The expansion of the company’s products offerings to include gloves will provide an additional stream of income to the company and this is expected to contribute positively to the future financial performance of the Eonmetall Group,” it said.
It added that the company believed that demand for gloves would remain strong, boosted by high infection rates of COVID-19 across the globe which necessitated the use of more protective equipment especially medical grade gloves.
Eonmetall said the proposed deal would come with a guarantee that LTSB would record a total profit after tax of RM100 mil for its 12-month financial years ending Dec 31, 2021 and 2022, in the proportion to be agreed on.
As of 10.35am today, EonMetall’s share price fell 0.70% to 70 sen with a market capitalisation of RM143.73 mil. – Nov 26, 2020
