KLSE main board candidate Hiap Teck Venture Bhd plans to use the RM50mil proceeds to be raised from its flotation exercise to reduce debts and fund working capital needs.
Of the total amount, RM16.6mil would be used to repay bank borrowings, RM30mil for working capital and the rest for listing expenses, its chairman Tan Sri Alwi Jantan said at the underwriting ceremony in Kuala Lumpur yesterday.
The steel manufacturing and trading company is expected to issue its prospectus by the end of the month.
AmMerchant Bank Bhd is the adviser, managing underwriter and placement agent for Hiap Teck's initial public offering (IPO) of 91.2 million 50 sen shares at an offer price of 55 sen per share. The co-underwriters are M&A Securities Sdn Bhd, MIDF Sisma Securities Sdn Bhd, AmSecurities Sdn Bhd, PM Securities Sdn Bhd, JF Apex Securities Sdn Bhd and Hwang DBS Securities.
Of the 91.2 million shares, 40 million are for selected private investors, 26.4 million to bumiputra investors approved by the International Trade and Industry Ministry and 14.8 million in a restricted issue to bumiputra investors nominated by the company.
A total of 10 million shares will be offered to the public, of which 5 million are reserved for eligible directors and employees, and 5 million for application by the public.
Hiap Teck currently has 3 manufacturing facilities in Klang, Selangor with a combined annual production capacity of 410,000 tonnes.
The company is operating at 75% of total capacity, which according to Alwi is above the industry average.
We export about 30% of our annual production to Singapore, Australia, Bangladesh and several countries in the Middle East.
Export earnings contribute about 15% to group annual turnover, he said.
He added that the company aimed to penetrate new markets such as China, Vietnam and Laos in the near future.
Hiap Teck is mainly involved the manufacture and distribution of scaffolding and steel pipes related products.
It reported a turnover of RM534mil for the year ended July 31, 2002, and profit after tax of RM14.3mil.
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