Unless otherwise defined, all terms used herein shall have the same meaning as those defined in the announcements dated 12 November 2021, 18 November 2021, 22 November 2021, 1 December 2021 and 27 May 2024 (“Announcements”) in relation to the Private Placement.

INTRODUCTION

The Board of Directors of D & O Green Technologies Berhad ("D&O") wishes to announce that D&O proposes to vary the utilisation of the balance proceeds of up to RM212.97 million from the private placement of 38,500,000 new ordinary shares in D&O. 

DETAILS OF THE PROPOSED VARIATION

On 1 December 2021, Maybank Investment Bank Berhad, had on behalf of the Board announced that D&O had completed the Placement following the listing and quotation of 38,500,000 Placement Shares on the Main Market of Bursa Securities on even date. The Placement raised total gross proceeds of RM216.37 million (“Placement Proceeds”) earmarked for the construction of third manufacturing plant (“Plant 3”).

On 27 May 2024, the Board had announced that the Company had resolved to extend the timeframe for the utilisation of RM213.12 million out of RM214.01 million of the Placement Proceeds that had been earmarked for Plant 3 of the D&O Group for another 3 years to 7 years. Unutilised balance as at 31 December 2025 was RM212.97 million.

D&O proposes to vary the utilisation of balance proceeds of up to RM212.97 million raised from the Private Placement to targeted capital expenditure (machineries and equipment) and repayment of borrowings, the details of which are set out as follows:

 Notes:

1. The Company proposes to vary the utilisation of the remaining balance of proceeds amounting to RM212.97 million, as set out above, which was originally for the construction of Plant 3. The revised utilisation comprises allocation towards targeted capital expenditure of RM85.97 million and repayment of borrowings amounting to RM127.0 million.
2. The proposed targeted capital expenditure will be directed towards enhancing and modernising existing machineries and equipment to improve product quality, production efficiency, and operational reliability. These investments are intended to support continuous technological advancement and optimise the use of existing production facilities. Collectively, these initiatives are expected to strengthen operational efficiency, reinforce capital discipline, and support the Group’s long-term competitiveness.

RATIONALE

Following the completion of its Private Placement in December 2021, The Group has enhanced productivity across its existing facilities through targeted upgrades, including the adoption of higher-density leadframes, double-deck casting machines and equipment upgrades. These measures have successfully increased production capacity without having to expand the physical footprint. With available space still remaining at Plant 2 to accommodate near-to-medium-term growth, the Group has determined that the construction of Plant 3 will not be necessary within the next three to five years.

The Group plans to allocate RM85.97 million towards focused capital expenditure aimed at technological enhancement and the modernisation of machinery and equipment. This investment is designed to further improve operational efficiency, process stability, yield consistency, and quality control across its production lines. Strengthening quality is central to this initiative, as it reduces the risks of rework, warranty claims, and reputational damage, while increasing the overall return on capital investments. This is especially critical in fast-evolving segments such as automotive lighting and semiconductor packaging, where quality standards and technology cycles continue to advance rapidly.

The Group also proposes to allocate the remaining unutilised proceeds of approximately RM127.0 million towards the reduction of bank borrowings. This strategic repayment will lower interest expenses, improve gearing ratios, and enhance the resilience of the balance sheet by reducing reliance on external financing. The resulting decline in the effective interest cost is expected to support improved profit margins.

EFFECTS OF THE PROPOSED VARIATION

The Proposed Variation will not have any effect on the issued share capital and substantial shareholders’ shareholdings of D&O. 

A circular setting out the details of the Proposed Variation will be despatched to the shareholders of D&O in due course.

APPROVAL REQUIRED

The Proposed Variation is subject to the approval of shareholders of D&O at an extraordinary general meeting to be convened.

INTER-CONDITIONALITY

The Proposed Variation is not conditional upon any other corporate proposal undertaken or to be undertaken by the Company.

INTERESTS OF DIRECTORS, MAJOR SHAREHOLDERS AND/OR PERSONS CONNECTED WITH THEM

None of the Directors, major shareholders of D&O, and/or persons connected with them has any interest, whether direct or indirect, in the Proposed Variation.

DIRECTOR'S STATEMENT AND RECOMMENDATION

The Board, after taking into consideration all aspects of the Proposed Variation, including the rationale and effects of the Proposed Variation and after careful deliberation, is of the opinion that the Proposed Variation is in the best interest of the D&O.

ESTIMATED TIME FRAME FOR COMPLETION

Barring any unforeseen circumstances and subject to the required approval being obtained, the Proposed Variation is expected to be completed by first quarter of 2026.

This announcement is dated 15 January 2026.