KUALA LUMPUR: Smart Asia Chemical Bhd, which is en route to a listing on the ACE Market of Bursa Malaysia Securities on May 28, 2024, aims to raise RM37.4 million from its initial public offering (IPO).
Its non-independent executive director cum chief operating officer Lim Kok Beng said the proceeds raised from the IPO will enable the company to cater to its next phase of its business expansion.
Smart Asia Chemical has earmarked RM16 million (42.78 per cent) of the proceeds to finance the construction of the Perak Plant and RM11 million (29.41 per cent) to part finance the purchase and commissioning of an automated paint production system in Perak Plant.
"Another RM5 million (13.37 per cent) has been set aside for the purchase of 250 sets of Smart Colour POS (point-of-sale) Tinting Machine. The remaining proceeds will be utilised for working capital and listing-related expenses," Lim said in his speech during the launch of the company's prospectus here, today.
The IPO entails the issue 93.50 million new shares at an issue price of 40 sen per share. Based on the group’s enlarged share capital of 369.85 million shares and the aforementioned IPO price, the market capitalisation will be approximately RM147.9 million.
Smart Asia Chemical primarily focuses on developing, manufacturing, distributing, and selling a diverse array of decorative paints and protective coatings for both household and industrial use.
Meanwhile, it said the establishment of the plant in Batu Gajah, Perak, is to streamline its manufacturing operations as well as to increase manufacturing activities especially when its existing facility in Johor has reached full capacity.
The Perak Plant will be focusing on the manufacturing of water-based decorative paints and protecting coating and its total estimated construction cost is about RM28.20 million.
Elaborating further, Lim said the plant will have a total build-up area of 95,170 square feet, consisting of a double-storey factory, a single-storey warehouse, office building, and other utility facilities.
"Perak is very strategic to us because of the abundant availability of calcium carbonate, the primary raw material. Because of the close proximity, we can be very cost-efficient as far as raw material is concerned. Also, the state is strategically located in the middle of Malaysia where we can better serve our customers in the north as well as central," Lim told a press conference.
The Perak Plant is scheduled to open on May 9 this year.
Of the public issue of 93.50 million new shares, Mercury Securities will underwrite 30.59 million IPO shares, which comprises 18.49 million IPO shares representing the portion made available to the Malaysian public via balloting.
Some 12.10 million IPO shares eill be allocated to eligible directors and employees as well as persons who have contributed to the success of Smart Asia Chemical and its subsidiaries.
The remaining 46.23 million iPO shares will be allocated to Bumiputera investors approved by the Ministry of Investment, Trade and Industry (MITI) and 16.67 million IPO shares will be by way of private placement to selected investors.
Mercury Securities Sdn Bhd is the principal adviser, sponsor, sole underwriter and sole placement agent.
Application for the IPO opens today and will be closed on May 13, 2024 at 5 pm. - Bernama
