ACE Market-bound Coraza plans to raise RM33mil from IPO

From left: M&A Securities Sdn Bhd head of corporate finance Gary Ting, M&A Securities managing director of corporate finance Datuk Bill Tan, Coraza Integrated Technology Bhd executive chairman Tony Ng and Coraza managing director Lim Teik Hoe.

KUALA LUMPUR: Integrated engineering supporting services provider Coraza Integrated Technology Bhd expects to raise RM33mil under its listing on the ACE Market of Bursa Malaysia for business expansion.

In a statement Wednesday, Coraza said it planned to use RM15.5mil (47.0%) raised from the initial public offering (IPO) to purchase new machinery over the next three years for its existing and new factory in Nibong Tebal, Penang

A further RM6.4mil (19.5%) of the proceeds will be used to part finance the construction of a new factory, as it expands its production capacity and service offerings to take advantage of the rapid growth in the semiconductor industry.

The new factory, adjacent to its current factory, is expected to have a total built-up area of 91,110.1 sq ft. The construction will be carried out in three phases and targeted for completion by December 2023.

The remainder of the proceeds will be used for the repayment of bank borrowings amounting to RM4.6mil (13.9%), RM1.5mil (4.6%) to extend its existing factory to add an additional area for capacity expansion, RM1.2mil (3.6%) to purchase and integrate a new enterprise resource planning (ERP) system to streamline and automate its processes for more efficient operations and RM3.8mil (11.4%) for estimated listing expenses.

Managing director Lim Teik Hoe said over the past two years, the company had received substantial continuous incremental orders for metal fabricated parts from its major customers, in particular precision-machined components used in the semiconductor industry.

“Despite the Movement Control Order restrictions in 2020, our revenue for the financial year ended Dec 31, 2020 grew 42.8% to RM83.7mil from RM58.6mil a year ago,” he said.

He added that the new machinery would further increase its capacity by approximately 25% and improve its service offerings to meet the increasing demand from customers operating in the booming semiconductor industry.

Under the listing exercise, Coraza is issuing 117.8 million new shares in Coraza, representing 27.5% of the enlarged share capital at an issue price of 28 sen per share.

Of the 117.8 million new shares, 21.4 million new shares will be made available to the Malaysian public via balloting.

As part of its listing exercise, the existing shareholders of the company will also make an offer for sale of 21.4 million existing shares to selected investors by way of private placement.

Based on the enlarged share capital of 428.3 million shares, Coraza is expected to have a market capitalisation of RM119.9mil.

The IPO is open for subscription from today to Jan 6, 2022.

Coraza is scheduled to be listed on the ACE Market of Bursa Securities by Jan 20, 2022.

M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO exercise.

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Coraza , IPO , Ace Market , Bursa Malaysia


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