by TMR / pic by RAZAK GHAZALI

TOP Glove Corp Bhd reassured its stakeholders the decision to revise its listing exercise in Hong Kong took into consideration the dilution impact on the earnings per share of the group.

The move to downsize its share offering on the Hong Kong exchange would see the existing shareholders experience a lower dilution effect of between 7.9% and 9%, and help the rubber glovemaker raise up to RM4.22 billion.

In a statement to The Malaysian Reserve on Wednesday, Top Glove stated that the objectives of the use of the funds raised from the listing exercise will enable the company to further increase its production capacity and expand on its ongoing environment, social and governance practices and initiatives, which will further enhance and strengthen its corporate governance and compliance framework.

The funds raised will also help it expand its business via synergetic mergers and acquisitions, and create more job opportunities for Malaysians in general.

The reply from the company came after some analysts had voiced concerns that the move to downsize its fundraising exercise was as a result of weaker investor demand on expectations the outlook of demand and prices of gloves had reached it speak and likely to correct going forward, as the rollout of Covid-19 vaccines gains pace across the world.

They added that price action also suggests investors were keener on peers like Supermax Corp Bhd and Kossan Rubber Industries Bhd due to their recent strong financial numbers.

“All IPOs in Hong Kong have been well-received and oversubscribed many times. Towards this, the company is confident Top Glove’s new issuance will be well-received as well,” it stated.

Top Glove fell 11 sen to RM5.67 on Wednesday, giving it a valuation of RM45.4 billion. The company is currently listed on Bursa Malaysia and the Singapore Exchange Ltd.