by NUR HANANI AZMAN / Pic by BLOOMBERG

FINTEC Global Bhd’s corporate exercise to raise fresh funds for its glove-making venture was successful with its rights issues oversubscribed by 24.99%.

In an exchange filing last Friday, Fintec noted that it received applications for 1.79 billion rights shares, surpassing the 1.43 billion units available for subscription.

The technology incubation and investment holding company’s rights issue exercise involved up to 1.97 billion shares with up to 1.57 billion free detachable warrants.

Fintec ED Steve Tan said the oversubscription figure indicated shareholders’ confidence in Fintec’s business and future prospects.

Fintec will raise about RM114 million from this corporate exercise, with RM65 million meant for the construction of a factory in Chemor, Perak, to spearhead its glove business venture.

“I would like to thank all investors who participated in the rights issue. It is gratifying to see the great interest in Fintec’s glove business expansion. The capital provided now enables acceleration in our glove ventures,” he said in a statement.

Fintec is among a handful of newcomers moving into the glove-making business that has enjoyed an exceptional year driven by higher product prices amid the Covid-19 pandemic.

Fintec’s proposed factory will have an estimated built-up area of 10,000 sq m to house 14 double former glove dipping lines.

According to the engineers from Ripcol Engineering Sdn Bhd, these lines have the capacity to generate an estimated maximum production output of 3.3 billion pieces of gloves per annum, which potentially able to generate revenue of RM738 million annually for the group.

Fintec intends to utilise the balance proceeds from the rights issue as working capital for the glove business.

Fintec also holds strategic stakes in several public-listed companies including Vsolar Group Bhd (renewable energy); AT Systematization Bhd (engineering); Focus Dynamics Group Bhd (food and beverage); NetX Holdings Bhd; Mlabs Systems Bhd and DGB Asia Bhd (financial and information technology) and Seacera Group Bhd (manufacturing and property development).

Fintec settled unchanged at 10 sen last Friday, valuing the group at RM286.99 million.

On Dec 2, Fintec announced its wholly owned subsidiary Fintec Glove Sdn Bhd is collaborating with AE Multi Industries Sdn Bhd and its partner, Ripcol Engineering Sdn Bhd, to construct 14 glove dipping lines.

Fintec said the construction of the 14 double former glove dipping lines on a 1.86ha land parcel in Chemor’s industrial site with a projected gross development value of RM160 million was expected to start in December, while production is to commence in June 2021.

Against a conducive backdrop for medical gloves demand, Fintec Glove expects to recoup its capital cost within three years, assuming the average selling price for each piece of glove remains above 20 sen per piece.

The pandemic has caused the demand for gloves to spike with medical gloves selling at nine cents per piece, Fintec noted.

The gloves business is anticipated to contribute 25% or more of the net assets or net profits of the group, Fintec stated in its past exchange filing.

According to an exchange filing, AT Systematization will start producing its own rubber gloves starting December.

Fintec also holds a 5.1% stake in GPA Holdings Bhd, an automotive batteries and component maker, which announced plans to make and sell rubber gloves as part of its own diversification plan.