KUALA LUMPUR: Meta Bright Group Bhd has proposed to diversify its leasing and financing segment into the provision of operating leases for machineries and equipment.
In a statement, the group said its board is in favour of the proposal to expand its business efforts in the area, on the basis that the proposed diversification is expected to contribute up to 25% or more of the net profit in the longer term.
This diversification is viewed as a lower risk move given that Meta Bright Group can leverage on its experience in assessing the creditworthiness of potential customers, garnered from its existing business loan operations.
Furthermore, Meta Bright management’s own experience and business relationships in heavy machinery end-user businesses such as construction and mining will afford it a head-start in business development for this diversification effort, with the initial agreements serving as proof-of-concept and practical demonstration of benefits to interested potential future lessees," said the group.
While officially reported as a leasing and financing business segment, Meta Bright's current business activities comprise of provisioning short to medium term personal and business loan to individuals and enterprises through a wholly-owned subsidiary of the group.
According to executive director Derek Phang Kim Liew, the group has been exploring prospects within the leasing business sub-segment.
He said it has secured two agreements comprising an operating lease for machineries and equipment to a Malaysian lessee, and another with an Australian lessee in the copper mining industry in Queensland.
Given the impact of Covid-19 on the group's historical earnings in the hospitality segment, Meta Bright has been looking to enhance its earnings base in addition to turning around its core business segments.
Our previous diversification into Energy Solutions, comprising Renewable Energy and Energy Efficiency, was a part of that enhancement effort.
While that has shown good early traction thanks to the dedication of our management team, we continue to seek additional avenues to broaden our earnings base with a view of delivering sustainable long-term profits to all our valued shareholders,” said Phang.
Meta Bright shareholders will be able to vote on the matter at the forthcoming extraordinary general meeting, he added.