SOUTHERN CABLE TO RAISE UP TO RM259 MLN TO FUND CAPACITY EXPANSION

KUALA LUMPUR, Oct 14 (Bernama) -- Southern Cable Group Bhd has proposed a private placement of up to 10 per cent of its total issued shares to raise as much as RM259 million to finance a multi-year expansion plan aimed at boosting its production capacity.

The cable and wire manufacturer said the plan will increase its annual cable and wire output by 25 per cent to 65,000 kilometres by end-2027, from 51,980 km per year as of June 30, 2025.

“Concurrently, it will triple its aluminium rod production to more than 60,000 metric tonnes (MT) per year from about 20,000 MT per year as at June 30, 2025,” Southern Cable said in a statement today.

It added that the expansion will be carried out in stages and is targeted for completion by the end of 2027. 

Southern Cable managing director Tung Eng Hai said the company is expanding to meet rising demand for cables and wires while supporting Malaysia’s development through projects in power utility, renewable energy, construction, infrastructure, and data centres.

“To achieve our long-term growth aspirations, we are also increasing our overseas revenue, with a target to have it contribute 30 per cent of total revenue within the next three years. The funds raised will strengthen our manufacturing capabilities and support our vision of becoming a leading integrated cables and wires manufacturer in the region,” he said. 

Of the total proceeds, RM129 million will be allocated for capital expenditure and expansion, including the construction and renovation of factories and warehouses adjacent to its existing operations in Kuala Ketil, Kedah.

The funds will also be used to acquire a warehouse, purchase new machinery and equipment, and install two new production lines for medium- to extra-high-voltage cables, as well as a new aluminium furnace, Southern Cable said. 

An additional RM5.1 million will be used to settle the balance of a previously acquired industrial land, while the remaining proceeds will go towards working capital to purchase raw material, as well as to repay borrowings and cover expenses related to the exercise.

“At an indicative issue price of RM2.16 per placement share, the proposed private placement is expected to raise total gross proceeds ranging from RM218 million to RM259 million,” it said. 

RHB Investment Bank Bhd has been appointed as the principal adviser and sole placement agent.

Founded in 1993, Southern Cable supplies cables and wires to key utility and telecommunications companies, including Tenaga Nasional Bhd, Telekom Malaysia Bhd, Sabah Electricity Sdn Bhd, Petroliam Nasional Bhd (Petronas), and Sarawak Energy Bhd.

-- BERNAMA