PETALING JAYA: Rubberex plans to diversify into property investment by acquiring a strategic stake in Empire City Mall.
The glovemaker has proposed to undertake a joint collaboration with Alliance Premier Sdn Bhd, EXSIM Holdings Sdn Bhd and JT Momentum Sdn Bhd
This is in respect of the development and operation of the mall that is being constructed as part of the overall development of Empire City in Petaling Jaya, Selangor.
The collaboration will done through a joint-venture company, Alliance Empire Sdn Bhd.
In a statement, Rubberex said it has appointed its non-independent executive director, Lim Chee Lip, to spearhead the project.
The group yesterday entered into a conditional subscription agreement with Alliance Empire for the subscription of shares in the company.
“This investment represents a 20% equity interest in Alliance Empire and Rubberex shall be subscribing for the shares at RM180mil, to be fully satisfied in cash,” Lim said in a statement.
Rubberex said the proposed diversification came at a time when the rubber glove industry’s outlook seems to be waning from its peak of supernormal profits and sky-high average selling prices towards normalisation as Malaysia and the rest of the world enters the endemic phase of the Covid-19 pandemic.
“Capitalising on the current global economic reopening and recovery themes, our first foray and diversification into property investment is in line with the group’s long-term strategy of delivering sustainable growth, steady income and value creation to the shareholders,” Lim said.
Empire City Mall has a net lettable area of about 1.7 million sq ft, including a total of 8,572 carpark bays in its vicinity. It is strategically located within Petaling Jaya and is surrounded by established townships with high traffic catchment, public amenities and is easily accessible by major expressways surrounding Empire City.
In a filing with Bursa Malaysia yesterday, Rubberex also stated that Empire City Mall has been independently valued at RM1bil.
It said the proposed subscription would enable the group to acquire a strategic foothold and participate in a sizable completed mixed-property development project within a relatively short period of two years.
The implementation of the proposed subscription and diversification exercises are expected to be completed by early 2022.
“Upon completion of the proposed subscription, the business of the group will be diversified into property investment including investment in shopping malls,” it said.