KUALA LUMPUR: SFP Tech Holdings Bhd, a one-stop integrated engineering and automation solutions provider, plans to raise RM62.23 million proceeds from its initial public offering (IPO) exercise.

       The company is en route to a listing on Bursa Malaysia's ACE Market on June 20.

       Chief executive officer Dr Chang Chee Jia said of the proceeds, RM24.5 million would be used to purchase new machinery and equipment, RM15 million for the construction of its third plant, and RM10 million for repayment of bank borrowings.

       "Manufacturing plant 3 in Penang, comprising a three-storey factory and warehouse with three-storey office building, will be utilised for computer numerical control (CNC) machining activities as well as design and development (D&D) centre. It is expected to be completed by end of the second quarter of 2022 and fully operational by the fourth quarter of 2022,” he told reporters after the launch of the company's prospectus here today.

       He said the company would also purchase a new laser cut and punch machine and 41 new CNC milling machines over the next three years, which would increase maximum manufacturing production by 35.9 per cent to 498,465 hours per annum from 366,795 currently.

       Chang said the remaining proceeds would be used for working capital expenditure (RM5.13 million), design and development centre (RM4.6 million) and listing expenses (RM3 million).

       "The group has continuously invested in advanced machinery and equipment in order to expand its range of products and services to include more complex products and larger products with higher accuracy as well as to better serve our customers from various industries.

       "As at April 29, 2022, our order book stood at RM20.2 million, largely coming from multinational companies," he added.

       The IPO exercise entails a public issue of 207.44 million new shares -- 40 million for the Malaysian public; 24 million for eligible directors, employees and business associates; 100 million for Bumiputera investors; and 43.4 million for selected investors.

       Based on the issue price of 30 sen per share and enlarged share capital of 800 million shares, the group will have a market capitalisation of RM240 million on listing.

       For the financial year ended Dec 31, 2021, the group recorded revenue of RM50.41 million and a profit after tax of RM19.42 million. - Bernama