Makalot Industrial Co’s (聚陽實業) board of directors yesterday priced 22 million new shares that are to be issued for a capital increase scheme at NT$136 apiece, the apparel maker said in a regulatory filing.
The price represents a discount of 30.79 percent from the closing price of NT$196.5 in Taipei trading yesterday, when the company’s shares rose 1.55 percent.
The company could raise NT$2.992 billion (US$105.02 million) in new capital from their sale, based on their pricing.
Photo: CNA
Makalot said in the filing that it plans to use part of the proceeds to pay off bank loans.
It announced the capital increase plan, the company’s first in six years, on Nov. 24 last year.
Makalot, which has paid-in capital of NT$2.199 billion, yesterday said it would finish its capital raising at the end of this month.
The company would use part of the new funds to expand production lines at its plants in Vietnam and Indonesia, which would increase its overall capacity by 20 percent this year, analysts said.
Makalot counts GAP Inc, Fast Retailing Co’s GU sub-brand, Kohl’s Corp, Target Corp, Walmart Inc and Hanesbrands Inc among its major customers.
The company earlier this month reported revenue of NT$6.04 billion for last quarter, down 24.7 percent quarter-on-quarter and 6.3 percent year-on-year, while revenue for the whole of last year totaled NT$24.92 billion, down 7.85 percent from NT$27.05 billion in 2019.
Analysts at Jih Sun Securities Investment Consulting Co (日盛投顧) and Yuanta Securities Investment Consulting Co (元大投顧) said that Makalot achieved slightly weaker-than-expected shipments last quarter due to low seasonality for channels from October to November last year and the effects of unprecedented shipping disruption caused by the COVID-19 pandemic.
Shortfalls in labor and truck-trailer chassis due to the pandemic have caused congestion at ports in the US and Europe, resulting in a shortage of containers and higher freight rates, they said.
However, analysts said they remain positive about Makalot’s business prospects for this quarter, as the first quarter is traditionally a high season for the textile industry and market demand is solid.
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