Unless otherwise stated, all definitions and terms used shall have the same meanings as defined in Hwa Tai’s announcements dated 24 April 2014, 12 May 2014, 28 May 2014, 18 June 2014, 5 December 2014, 15 December 2014, 5 January 2015, 14 January 2015, 13 March 2015, 7 April 2015 and 14 April 2015 (“Proposal Announcements”), the circular dated 10 October 2014 (“Circular”) and the abridged prospectus dated 16 March 2015 (“AP”) in relation to the Rights Issue, the announcements dated 6 April 2018 and 10 April 2018 in relation to the 1st extension of time (“1st EOT Announcements”) and the announcement dated 8 April 2019 in relation to the variation and the 2nd extension of time (“2nd EOT Announcement”) .

Hwa Tai Industries Berhad (“Hwa Tai” or “the Company”) wishes to inform that as at 9 April 2020, the Company has yet to fully utilise the balance of proceeds raised from the Rights Issue amounting to RM7.0 million which was earmarked for capital expenses for business expansion. The time frame for utilising the proceeds for capital expenses for business expansion was extended to 13 April 2020 as announced on 8 April 2019 as detailed in the 2nd EOT Announcement.

The proceeds raised from the Rights Issue earmarked for capital expenses for business expansion which initially entails the establishment of a new hybrid biscuit line was instead varied to the purchase of an indirect fire convection (“IFC”) biscuit line as announced on 8 April 2019 as detailed in the 2nd EOT Announcement.

The reason for the Company not being able to fully utilise the balance Rights Issue proceeds within the deadline of 13 April 2020 is due to the impediments of the Covid-19 pandemic which has caused the travel ban on certain countries resulting in a further delay of the time for completion of the installation of the IFC biscuit line by the overseas supplier. Thus, as at 9 April 2020, the Company is unable to utilise the remaining balance of RM910,000 and it is expected to be fully utilised earliest in June 2020. In this connection, the Company wishes to inform of its decision to extend further the time frame for utilisation of the said proceeds for another 3 months period until 13 July 2020 (“3rd Revised Time Frame”) to provide additional time for the installation and commissioning of the IFC biscuit line.

As at the date of this announcement, the status of utilisation of proceeds from the Company’s Rights Issue completed on 14 April 2015 and details of the 3rd Revised Time Frame are as set out in the table below:

Notes:

*          The timeframe for utilisation of proceeds for acquisition of biscuit line was extended from 36 months to 48 months as announced on 6 April 2018 and 10 April 2018.

**        The timeframe for utilisation of proceeds for acquisition of biscuit line was extended from 36 months to 60 months as announced on 8 April 2019. In the same announcement, the  Company disclosed that it intends to vary the type of biscuit line to be purchased from a hybrid biscuit line to an IFC biscuit line.

***      The timeframe for utilisation of proceeds for acquisition of biscuit line is proposed to be extended by a further 3 months from 60 months to 63 months to facilitate the installation and commissioning of the IFC biscuit line.

As at the date of this announcement, an amount of RM6.09 million was paid to the oversea suppliers of the IFC biscuit line.

The unutilised proceeds of RM0.91 million are placed in fixed deposits with a licensed financial institution and interest earned is used for working capital.

The Board is of the opinion that the 3rd Revised Time Frame is in the best interest of the Group and will not have material adverse effect on the financial performance of the Group.

The 3rd Revised Time Frame does not require the approval of Bursa Malaysia Securities Berhad or any other regulatory authorities or the shareholders of Hwa Tai

This announcement is dated 9 April 2020.