PETALING JAYA: LKL International Bhd obtained shareholders’ approval at the group’s extraordinary general meeting today to undertake private placement and employee share option scheme (Esos) exercises.

The private placement, proposed on July 17, entails the issuance of up to 85.8 million placement shares amounting to not more than 20% of its total ordinary shares issued at an indicative price of RM1.10 per share. With up to RM94.3 million projected to be raised, the group plans to allocate RM26.5 million for capital expenditure (capex) and expansion plans. The majority of the capex is for the RM13.0 million purchase and setting up of two units of adjoining new factory buildings near to the group’s current head office and manufacturing facilities. Additionally, LKL International will spend RM9.5 million of the proceeds to construct a three-storey steel structure extension across existing factory buildings and install a conveyor line to automate its epoxy powder coating process. About RM4 million of the capex will be used to purchase new machinery.

Managing director Lim Kon Lian said the group’s capex and expansion plans are timely to enhance manufacturing capacities and capabilities to fulfil this uptrend. “The proposed private placement would help us raise funds expeditiously and cost effectively to fund our manufacturing capex. In addition, the proceeds would also improve the company’s liquidity and financial flexibility, and strengthen our overall financial position

through enlarged working capital to support our growth.” The group also obtained shareholders’ approval for the proposed Esos encompassing the issuance of up to 15% of the enlarged total number of issued ordinary shares and private placement shares. The Esos will be carried out and completed upon the expected completion of the private placement exercise in the first half of 2021.