One Glove proposes rights issue to repay shareholder advances, fund working capital and capex

KUALA LUMPUR (Nov 3): Loss-making One Glove Group Bhd (formerly known as Gets Global Bhd) has proposed a rights issue to raise up to RM85.2 million to repay advances to shareholders, and for working capital and capital expenditure (capex) requirements.

The bus service operator turned glove maker said the exercise entails the issuance of up to 284 million new shares at 30 sen apiece on the basis of one rights share for every one existing share held on a date to be determined later.

The rights issue comes attached with up to 142 million free detachable warrants on the basis of one warrant for every two rights shares subscribed, the group said in a Bursa Malaysia filing.

"The issue price of 30 sen per rights share represents a discount ranging from approximately 20.84% to 51.75% to the theoretical ex-rights price, calculated based on the five-day volume weighted average market price (VWAP), one-month VWAP, three-month VWAP, six-month VWAP and 12-month VWAP up to and including Thursday (Nov 3)," One Glove said.

Of the estimated proceeds to be raised from the exercise, One Glove said it has allocated RM47.45 million for partially repaying shareholder advances, RM21.22 million for working capital, and RM16 million for capex.

One Glove said the group will offset RM47.45 million of RM111.28 million in advances from its substantial shareholders ADA Capital Investments Ltd and Teong Lain Aik, who is the chief executive officer of the group's unit Onetexx Sdn Bhd.

ADA Capital and Teong advanced the RM111.29 million to One Glove from October 2020 to October 2022 as the initial capital outlay required for the construction costs, purchases of plant and machinery and working capital for Onetexx for the
construction and operations of its glove manufacturing factory, and for working capital requirements of the group.

"There will be no cash inflow to One Glove amounting to RM47.45 million as such amount of advances will be capitalised to issue the rights shares and settle the amounts payable under the undertakings under the set-off arrangement," One Glove said.

ADA Capital holds a 45.07% direct stake in One Glove, while Teong has a 10.62% direct stake.

For the third quarter ended June 30, 2022, One Glove posted a net loss of RM7.83 million compared with RM15.35 million a year earlier, due to its glove manufacturing segment's low-capacity utilisation in view of continued soft market demand and declining average selling prices of rubber gloves.

Revenue dropped to RM2.76 million from RM7.71 million, due to there being no revenue generated from its express bus services business because of the continued suspension of operations.

Shares in One Glove finished 5.5 sen or 10.68% lower at 46 sen on Thursday, giving the group a market capitalisation of RM129.38 million.