This article first appeared in The Edge Financial Daily on June 26, 2019
KUALA LUMPUR: Tashin Holdings Bhd, to list on Bursa Malaysia’s ACE Market on Aug 1, expects to raise RM34.41 million to build a new factory.
In a statement yesterday, Tashin said more than half or RM17.55 million of the proceeds from its initial public offering (IPO) will be used to purchase a piece of industrial land in Seberang Perai, Penang for the construction of a 90,000 sq ft factory.
Further, RM7.7 million (22.38%) is to buy machinery and equipment to support its business expansion into manufacturing wire mesh and upgrade its existing steel processing line; RM5.96 million (17.32%) for working capital; and the remaining RM3.2 million (9.3%) to defray listing expenses.
Tashin managing director Lim Choon Teik said the new factory is intended to house the company’s existing manufacturing line for flat and square bars and its new manufacturing line for wire mesh.
“We believe the addition of wire mesh in our manufactured product offerings allows us to further improve our profitability and strengthen our customer base, in turn enhancing our competitive position,” he added.
Under the listing, Tashin is issuing 59.33 million new shares at 58 sen per share, of which 17.45 million shares are available to the Malaysian public via balloting; 8.72 million shares for eligible directors and employees, as well as eligible directors and Prestar Group employees; 17.45 million shares for entitled shareholders of Prestar; and the remaining 15.71 million shares earmarked for a private placement to selected bumiputera investors approved by the Ministry of International Trade and Industry (Miti).
As part of its listing, the company’s existing shareholders will also make an offer for sale of 55.49 million shares to selected investors and bumiputera investors approved by Miti via a private placement.
Based on the enlarged share capital of 348.99 million shares, Tashin is expected to have a market capitalisation of RM202.41 million.
M&A Securities Sdn Bhd is the adviser, sponsor, managing underwriter, joint underwriter and placement agent for the IPO. Malacca Securities Sdn Bhd and JF Apex Securities Bhd are joint underwriters.