KUALA LUMPUR, Ho Wah Genting Bhd (HWGB) has proposed to undertake an issuance of redeemable convertible notes with an aggregate principal amount of up to RM60 million, which will mature 36 months from the closing date of the proposed issuance.

In a filing with Bursa Malaysia, the company said it entered into a conditional subscription agreement with Advance Opportunities Fund VCC (AOF VCC), Advance Opportunities Fund 1 (AOF 1) and Advance Opportunities Fund (AOF) to undertake the said issuance.

The proposed issuance will be undertaken in three tranches, subject to the terms and conditions as set out in the subscription agreement.

‘Proceeds from the proposed issuance will mainly be utilised for working capital, including investments and expansion of business activities, and repayment of existing financing facilities,” it said.

HWGB is mainly engaged in the manufacture and trade of wires and cables, moulded power supply cord sets, and cable assemblies for electrical and electronic devices and equipment.

A
s for its prospects, the company said despite the broadly positive overview and outlook of the wire and cable market in North America, Malaysia, Indonesia, Thailand, Vietnam and Singapore, it expects business operations of the moulded power supply cord sets division to remain challenging.

The challenges include high working capital demands, fierce competition in the United States (US) market, rising inflation in Indonesia-particularly due to mandated annual wage and salary increases-higher costs for materials and components, significant fluctuations in copper prices, and increasing shipping and freight expenses.

In addition, growing fear of an economic recession in the US and further escalation of geopolitical tensions further adds to the already challenging operating environment of the moulded power supply cord sets division, it said.

Source: BERNAMA News Agency