KUALA LUMPUR: Iconic Worldwide Bhd’s unit is securing RM130.26mil in banking facilities to part finance its purchase of land and to build a factory and also glove-related machinery.
It said on Friday its unit Iconic Medicare Sdn Bhd had entered into an agreement to secure the loan facilities comprising term loans, overdraft and multi-trade finance facilities granted by Ambank (M) Bhd.
The loans would be used to pay part of the purchase price for a 5.53 acres of leasehold industrial vacant land in the Batu Kawan Industrial Park, Penang and part finance the construction of a factory, piping and equipment, acquisition cost of glove related machinery.
Iconic said Ambank requires that Datuk Tan Kean Tet shall remain as the substantial shareholder throughout the tenure of the banking facilities and Iconic Medicare is to maintain a gearing ratio of not more than 3.20 times.
“The banking facilities will result in Iconic Group incurring interest expense that will have direct impact on the Group’s earnings throughout the subsistence of the Banking Facilities.
“However, upon the completion and commencement of full operation of the factory, Iconic Group envisage that the revenue derived from the manufacturing of personal protection equipment business segment, namely gloves and disposable face masks, will contribute significantly to Iconic group’s future earnings, ” it said.
It also said the banking facilities are not expected to have any material effect on the net assets and gearing of the group except for the increase in gearing to a maximum of 1.14 times.