KUALA LUMPUR: TMK Chemicals Bhd, which is scheduled to be listed on the Main Market of Bursa Malaysia on Dec 12, 2024, aims to raise RM385mil from its initial public offering (IPO) to fund its business expansion.
The group will make a public issue of 220 million new shares at RM1.75 per share. The IPO will not include any offer for sale of shares.
TMK Chemicals managing director Wong Kin Wah said the group is allocating RM90.2mil, or 23.4% of its IPO proceeds, to construct Banting Plant 2, which will increase its annual manufacturing capacity for chlor-alkali derivatives, such as sodium hydroxide, chlorine, hydrochloric acid, sodium hypochlorite, and hydrogen.
The new facility will match the current capacity of Banting Plant 1, doubling the group’s total production capacity to 432,000 tonnes annually upon commissioning in 2026.
“The new chlor-alkali derivatives manufacturing facility is expected to double our manufacturing capacity, enabling us to meet growing demands,” Wong, who is also a non-independent executive director of the company, said in his speech during TMK’s prospectus launch.
Another RM49.5mil will be used to establish a new processing facility in Singapore, as the current facilities there are at full operational capacity.
TMK has also earmarked RM99.1mil or 25.7% of the proceeds for potential acquisitions and investments in inorganic chemicals or related industries, although specific targets have yet to be identified.
Additionally, the group will use RM79.4mil of the IPO proceeds for working capital and RM50mil to pare down borrowings, with the remainder covering IPO-related expenses.
Upon listing, TMK Chemicals will have a market capitalisation of RM1.75bil based on an enlarged share capital of one billion shares.
The group also targets a dividend payout ratio of 30% to 50% of its profit after tax.
Established in 1989, TMK Chemicals has 35 years of experience in total chemicals management, specialising in inorganic chemicals.
The group operates 15 facilities, two terminals, and a manufacturing plant to meet growing regional and international demand.
Its products serve diverse industries, from healthcare and construction to automotive and consumer goods, including items as varied as shampoos and car batteries.
TMK currently exports to 26 countries, primarily in the Asia-Pacific region, having a market share of 25% in Malaysia and 24% in Singapore.
The group has a product portfolio of 4,427 stock-keeping units (SKUs) of chemicals to meet the needs of a diverse customer base.
TMK’s listing marks the 49th IPO on Bursa Malaysia this year.
The group's public issue portion of the IPO will be made available for subscription from today until Nov 29.
