Zantat to raise proceeds of RM14mil from IPO for R&D, upgrades

From left: M&A Securities head of corporate finance Gary Ting, M&A Equity Holdings Bhd managing director Datuk Bill Tan, Zantat deputy chairman Chan Hup Ooi, managing director Ivan Chan, chairman Yap Yoong Kong and executive director Chan Jee Chet

KUALA LUMPUR: Zantat Holdings Bhd aims to raise RM14mil from its initial public offering (IPO) en route to a listing on the ACE Market of Bursa Malaysia on March 27, 2024.

The high-grade calcium carbonate powder producer said in a statement it plans to use RM3.8mil of the proceeds to upgrade its research and development (R&D) centre and purchase additional test and product development equipment.

A further RM1.4bil of the proceeds will be used to purchase high efficiency machine components such as fully integrated automatic robotic arm palletising system and high-efficiency motors to automate its packing system and move towards industrial automation.

Of the remaining proceeds, RM1mil will be used to upgrade Calrock Perak Plant’s infrastructure, RM1.4mil will go towards working capital, RM3.4mil to repay bank borrowings and RM3mil to defray the estimated listing expenses.

Zantat managing director Ivan Chan said the upgrading of R&D facilities within Zantat Perak Plant 1 is crucial to facilitate the company’s product expansion plan.

“With the upgraded R&D facility and enhanced testing capabilities, we will be focusing on our in-house product development and enhancement including testing of our products as well as for new and existing customers pertaining to our calcium carbonate products and bioplastic compounds.

“As part of our strategy to expand our product range, we intend to develop three new bioplastic compounds and enhance our ultrafine grade ground calcium carbonate namely “Zanelite” series and produce more varieties to generate new revenue stream,” he added.

Zantat is issuing 56 million new shares, representing 20% of the enlarged share capital at an issue price of 25 sen per share.

Of the issue shares, 14 million shares will be made available to the Malaysian public via balloting, 11.2 million issue shares to its eligible directors, employees and persons who have contributed to the success of Zantat Group under pink form allocations, and the remaining 30.8 million issue shares will be reserved for private placement to selected investors.

Existing shareholders of the company will also make an offer for sale of 16.8 million existing shares to selected investors by way of private placement.

Based on the enlarged share capital of 280 million shares, Zantat is expected to have a market capitalisation of RM70mil after listing.

According to the company, it registered a net profit of RM5.7mil on the back of RM91.1mil turnover in the nine months ended Sept 30, 2023.

This compares with a net profit of RM5.4mil and turnover of RM113mil in FY22.

Zantat said its net margin in 9MFY23 has improved to 6.2% from 4.8% in the previous financial year.

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