You are here
ASA unit enters partnership agreement to make steel trailer wheels
CATALIST-LISTED Advanced Systems Automation (ASA) announced on Sunday night that its unit Yumei Technology Sdn Bhd has entered an agreement with Nakareg International Company, in which Yumei will be appointed Nakareg's business partner to manufacture steel trailer wheels.
The total investment cost for the project, including capital expenditure and working capital requirements, is expected to be 6.16 million ringgit (S$2.04 million), funded mainly through bank loans.
"The project is expected to improve Yumei Technology's overall manufacturing capabilities and allow it to offer a more comprehensive value proposition to a broader customer base across a wider region," said ASA.
Part of the project will require Yumei Technology to acquire metal stamping and welding capabilities, with the rest being part of the firm's existing expertise and ordinary course of business.
ASA said the project is not expected to change the risk profile of the group, for several reasons: the project will not result in a change in control, with no shares in ASA's capital being issued for the project; the project is expected to have a positive impact on Yumei Technology's earnings and the cost will be funded mainly through bank loans; and the project does not involve entering a new business sector.
The project is not expected to have any material impact on ASA's consolidated net tangible assets per share or earnings per share for the current financial year ending Dec 31, 2019. None of ASA's directors, controlling shareholders and/or their respective associates has any interest, direct or indirect, in the project.
ASA said further details will be announced, as and when appropriate, in due course.
ASA shares last closed up 0.1 Singapore cent at 0.2 Singapore cent on Friday.