KUALA LUMPUR (April 26): Healthcare furniture and equipment manufacturer LKL International Bhd's initial public offering (IPO) is expected to raise RM22.6 million upon its scheduled listing on the ACE market of Bursa Malaysia on May 16.

LKL International's IPO involves the issuance of 113 million new shares at an issue price of 20 sen per share.

Of that, 8 million shares will be made available for the public, 13.2 million for its eligible directors and employees, 42.2 million for placement and 49.6 million for bumiputera investors.

With the company's enlarged issued and paid-up capital of 428.8 million shares, it is expected to have a market capitalisation of RM85.76 million.

Of the proceeds raised, RM8.5 million (37.61%) will be used for capital expenditure, RM4 million (17.68%) will be for paying off its bank borrowings, RM7.61 million (33.65%) for working capital, and RM2.5 million (11.1%) to defray listing expenses.

LKL International co-founder and managing director Lim Kon Lian said today the capex is primarily for the purchase of three computer numerical control machinery, which will allow the group to increase their operating efficiencies and process accuracies by minimising wastage and reducing the company's dependence on labour.

"It has been 20 years since we commenced our business operations in the provision of medical/healthcare beds, peripherals and accessories," he said at the launch of the company's prospectus here.

"Since then, the market demand for the medical industry has continued to grow, affording us the ability to expand our business nationwide and to overseas markets of over 30 countries and across six continents, making us one of Malaysia's largest manufacturers of medical/healthcare beds, peripherals and accessories," he added.

The company's export market includes the Netherlands, the United Kingdom, Finland, Kenya, Botswana, Mauritius, Qatar, Syria and Jordan.

Alliance Investment Bank chief executive officer Mahesh Rupawalla said based on an independent market research conducted by Smith Zander, LKL International commands 40.5% of the local market share.

"The impending listing will form the catalyst for the group's next phase of growth, boosting their corporate profile and status, while increasing the group's standing and market share in the local and global market," he added.