KUALA LUMPUR: HLT Global Bhd, en route to a listing on the ACE Market of Bursa Malaysia on Jan 10, 2017, is looking to raise RM17.816 million in an initial public offering (IPO).
The manufacturer of glove-dipping lines is issuing 39.59 million new shares at 45 sen apiece, of which 13.2 million shares will be made available to the public and 26.39 million shares to identified bumiputera investors approved by the international trade and industry ministry.
The IPO also comprises an offer for sale of two million shares to eligible directors and employees of the group, and 32.31 million shares to selected investors via private placement.
HLT Global executive director and chief executive officer (CEO) Chan Yoke Chun said about 50.52% of proceeds raised from the IPO will be used for capital expenditure (capex), research and development (R&D) expenditure (8.42%), working capital (27.59%) and estimated listing expenses (13.47%).
“The capex includes a planned purchase of a two-acre (0.81ha) land in the Klang Valley, along with the construction of a new 56,800-sq ft factory, of which 60% or 34,200 sq ft will be utilised for production,” she told reporters after the launch of the group’s prospectus yesterday.
Chan, who is also a major shareholder with a 51% stake in HLT Global, said the new factory will complement the production capacity of its current factory in Puchong, Selangor, which is operating at 84.6% capacity. The group produces between eight and 11 glove-dipping lines per year.
HLT Global’s customers in Malaysia include Green Prospect Sdn Bhd, YTY Industry Sdn Bhd and Rubberex Alliance Sdn Bhd. The group also has regional partners, such as Cardinal Health 222 (Thailand) Ltd, PT Medisage Technologies (Indonesia) and Kanam Latex Industries (India).
Chan also said the group is looking to boost its export revenue in 2017 by targeting new regional markets for its glove-dipping line manufacturing business.
“There are potential rubber glove manufacturing factories being set up there [in Vietnam] by investors from China and Taiwan. Next year, we will try to penetrate the Vietnam market,” she added.
Currently, about 70% of its revenue comes from domestic sources, with the rest from the export market.
The group attributed its current revenue make-up to the absence of new international projects, as most of its overseas projects had been completed.
On Bank Negara Malaysia’s move that requires 75% of export proceeds received from Dec 5 to be converted to ringgit, Chan said HLT Global will not be affected as about 70% of its raw materials are sourced locally.
“In fact, we will gain as we sell our products in US dollars,” she added.
As at July 31, 2016, the group’s outstanding order book stood at RM69 million, which will keep it busy until 2017.
For the first seven months ended July 31, 2016 (7MFY16), HLT Global’s net profit rose 17% to RM6.21 million from RM5.3 million a year ago, while revenue grew 53% to RM47.69 million from RM31.13 million in 7MFY15.
Upon listing, Chan’s stake will be reduced to 36.72%, while its deputy chairman and executive director Wong Kok Wah will see his shareholding fall from 49% to 35.28%. The group’s market capitalisation will grow to RM118.76 million.