KUALA LUMPUR: HLT Global Bhd, a fabricator of factory equipment, is planning to acquire a majority stake in a rubber glove maker to diversify its income stream.
The company told Bursa Malaysia on Thursday that it had entered into a head of agreement (HOA) with Suntel International Co Ltd and two other individuals to purchase a 55% stake in HL Rubber Industries Sdn Bhd for RM33mil.
It will issue 113.8 million new shares at 29 sen each to the vendors to pay for the acquisition.
“As a consequence of the proposed acquisition, HLT proposes to diversify its existing fabrication business of glove-dipping lines to include the manufacturing and trading of rubber gloves,” it said.
HLT expects HL Rubber to contribute more than 25% of the group’s net profit.
The company said the vendors have provided guarantee and covenant that HL Rubber will achieve an aggregate after tax profit of not less than RM10mil for the financial years ending Dec 31, 2018 (FY18) and FY19.
Shares in HLT was last traded at 31.5 sen on Wednesday, before trading was suspended on Thursday to make way for the announcement.