KUALA LUMPUR: YB Ventures Bhd (YVB) has received shareholders approval to undertake the issuance of the irredeemable convertible unsecured loan stocks (ICULS).
Executive director Au Yee Boon said shareholders had shown their support and confidence in its prospects.
“We are confident that following the planned production capacity expansion with the proceeds raised, YVB will be fully equipped to implement its strategic plan and capitalise on the recovery of its operating markets,” he said in a statement today.
The rights issue entails listing up to 1.21 billion ICULS, based on five ICULS at RM0.04 each for every one existing ordinary share in the company.
Under the maximum subscription level, the company will raise RM48.5 million from the issuance of the ICULS.
Chairman Tan Sri Dr Ali Hamsa applauded YVB management for taking this bold decision to ramp up the company’s capacity by 50 per cent amid the Covid-19 pandemic.
“This shows that YVB has strong confidence in its prospects ahead, and I believe the company will be able to reap the benefits once the situation returns to normalcy,” he said.
YVB intends to utilise most of the proceeds raised to upgrade existing production lines and construct four new production lines, costing approximately RM45.6 million.
For context, YVB’s existing manufacturing facilities comprise eight production lines, with a production capacity of approximately 7.12 million sq metres of ceramic, homogenous and porcelain tiles annually.
“After deliberation with the management team, we have decided to embark on this funding option, as it enables the company to raise funds without incurring high-interest costs compared to borrowings from financial institutions.
“The 0.10 per cent annual coupon payment on the nominal value of the ICULS is much lower than the base lending rate of financial institutions,” Au added.
In April 2021, YVB saw a strong interest among the Real Estate & Housing Developers’ Association (REHDA) in the company’s new flagship product, the Talos Living Tiles, which is the first negative ion tiles launched in Malaysia.
According to Au, the launch of Talos Living Tiles is a step-up for YVB as it moves towards the premium segment.