KUALA LUMPUR (Dec 15): Paper-based packaging maker HPP Holdings Bhd, which is set to list on the ACE Market of Bursa Malaysia on Jan 20 next year, expects to raise gross proceeds of RM31.92 million from its initial public offering (IPO) to, among others, raise the manufacturer’s printing capacity, repay bank borrowings and finance the company’s working capital requirements.

According to HPP’s prospectus, which was filed with Bursa today, the company intends to allocate approximately RM13.03 million of the gross proceeds from the IPO to acquire machines, which will help raise the manufacturer’s printing capacity, while RM7.78 million will be used to repay bank borrowings.

HPP’s prospectus said the company’s IPO comprises a public issue of 88.67 million new shares and an offer for sale of 20 million existing shares at 36 sen each. 

Based on the company’s enlarged number of issued shares upon listing at 388.43 million shares, the IPO price of 36 sen values HPP at about RM139.83 million.

At 36 sen each, the public issue of 88.67 million new shares will raise RM31.92 million for HPP’s business expansion, according to the company.

"Our company will not receive any proceeds from the offer for sale.

“The gross proceeds from the offer for sale amounting to RM7.2 million will accrue entirely to the selling shareholders,” HPP said.

Aurora Meadow Sdn Bhd is the controlling shareholder of HPP with a 67.02% stake prior to the IPO, according to HPP.

HPP said that after the IPO, Aurora Meadow’s stake in HPP will drop to 51.72%.

Aurora Meadow’s directors and substantial shareholders include Kok Hon Seng, who owns a direct 52.29% stake in Aurora Meadow, according to HPP.