KUALA LUMPUR (June 1): FoundPac Group Bhd, the Penang-based semiconductor group that is eyeing a listing on the Main Market of Bursa Malaysia, said it intends to use the proceeds from its initial public offering (IPO) to fund its overseas expansion plans.

Based on its draft prospectus, the group, which produces engineering parts for semiconductor manufacturers, will be issuing 40 million new shares via its IPO.

The group said 18.5 million shares will be made available for the Malaysian public and another 10.5 million shares for eligible directors, employees and business associates of FoundPac, while the balance 11 million shares are to be placed out to identified investors.

FoundPac said it will allocate a portion of the proceeds of its listing to set up sales offices in Europe and the US over the next two years.

It said Europe and the US are the group's major contributors, accounting up to 90% of its annual revenue from FY13 to FY15.

"Our group intends to continue to focus on Europe and US for future customer and market expansion for the group. To this end, we aim to set up sales offices in Europe and US in order to establish our presence in these markets.

"With our respective sales offices present in these markets, we will be in closer geographical proximity to many potential customers, which will enable our Group to have better access to these customers and allow us to shorten our response times when attending to customer enquiries and when providing technical support," said FoundPac.

Besides that, the group has also earmarked some of its proceeds to expand its production capacity by purchasing new equipment for production, quality assurance, logistics and engineering departments and other facilities.

These new equipment include nine computer numerical control machines, two coordinate-measuring machines and one grinding machine.

"The increase in production capacity will enable us to expand more aggressively, as we will be able to accept more job orders, ensuring that we will not be constrained by capacity limitations for the foreseeable future, and this will be an impetus to bring our group to the next phase of growth," said the group.

FoundPac is also eyeing to set up a dedicated design and development (D&D) team to focus on product development, which is currently being carried out by its engineering team, along with other aspects of the group's operations such as production and manufacturing.

"We plan to staff our D&D team initially with six persons, and will expand the team as and when required. Further, we will also need to invest in equipment which will include servers, desktops, laptops and required D&D software," it said.

The group is led by Lee Chun Wah as chief executive officer, and Datuk Seri Tunku Puteri Intan Safinaz Tuanku Abdul Halim, the daughter of Kedah Sultan Tunku Abdul Halim Tunku Badlishah.

For the year ended June 30, 2015, the group posted a net profit of RM12.9 million, up 40% from RM9.21 million in the previous year, on the back of a 14% increase in revenue to RM34.37 million from RM30.2 million.