Cape EMS seals Johor expansion partnership, proposes RM50 million RCPS issuance

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Cape EMS Johor partnership & RCPS

Highlights

Cape EMS has entered into a strategic agreement with Pro3C to expand manufacturing operations in Johor, increasing production capacity to 18 lines by 2027.
Pro3C will subscribe for 50 million Cape EMS RCPS at RM1 each, providing RM50 million in financing for expansion, equipment and operating expenses.
The RCPS can be converted within five years into up to 166.67 million Cape EMS shares, representing 14.38% of the company's enlarged issued share capital.

This article was translated from the original. Read the original version by our correspondent here.

Details of the collaboration and new financing

The Edge Malaysia reported that Cape EMS has entered into a memorandum of agreement with Pro3C (Malaysia) Sdn Bhd, a unit of FIC Global Inc, to serve as a local strategic partner for the expansion of the company's manufacturing operations in Johor.

Under the agreement, Cape EMS will provide a comprehensive operating ecosystem to accelerate Pro3C's market deployment, including integrated manufacturing support, supply chain management, facilities and operational support services. Pro3C's Johor facility currently has eight surface-mount technology production lines, and the company plans to increase capacity to 18 lines by 2027.

As part of the transaction, Pro3C will subscribe for 50 million Cape EMS redeemable convertible preference shares at RM1 per share, according to the company's filing. Proceeds from the issuance will be used for RM12 million in capital expenditure for production facilities and refurbishment works, RM25 million for equipment, and RM12.73 million for operating expenses.

The RCPS have a five-year term and are convertible at between 30 sen and 65 sen per share, allowing conversion into up to 166.67 million Cape EMS shares, equivalent to 14.38% of the company's enlarged issued share capital.

Impact on Cape EMS' operations and position

Optical transceivers convert electrical data signals into light pulses for fibre-optic transmission and vice versa, while surface-mount technology enables modules to be soldered directly onto the surface of printed circuit boards. This expansion positions the Johor operations within the supply chain linked to demand for AI infrastructure and next-generation optical interconnect technology.

Cape EMS group managing director and chief executive officer Christina Tee said the proposal creates an important opportunity to revitalise the company's EMS business and reposition the group within the rapidly growing AI and advanced electronics manufacturing ecosystem. FIC Global chairman Leo Chien said the signing of the memorandum reflects the group's confidence in Cape EMS as a strategic manufacturing and operations partner in Malaysia.

Cape EMS changed its financial year in 2025 after facing substantial losses. For the financial year ended June 2026, the company recorded a net profit of RM14.4 million, or 1.45 sen per share, on revenue of RM425.6 million.

In our earlier coverage of the approval of 27 data centre projects under the data centre task force through July 2026, we outlined the RM225.97 billion investment value and the concentration of projects in Johor, Selangor and Negeri Sembilan. We also highlighted the impact on the high-skilled labour market, the minimum 30% local content requirement, and regular monitoring of project implementation.

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