Thursday 28 Mar 2024
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KUALA LUMPUR: Automotive upholstery manufacturer Pecca Group Bhd is looking to raise RM67.87 million from its initial public offering (IPO), of which a large chunk will be used for working capital and to repay bank borrowings.

In a draft prospectus lodged with the Securities Commission Malaysia last Friday, Pecca Group revealed that the bulk of the proceeds or 41.95% to be raised from the IPO will be used for working capital and 25.2% to repay bank borrowings.

Another 11.12% will be used to buy new machinery, 5.52% to open new retail outlets, 1.47% to expand its subsidiary Pecca Leather Aviation Services Sdn Bhd’s (PAviation) business and the balance for listing expenses.

The planned IPO of Pecca Group will involve the public issue of 47.8 million new shares, representing 25.42% of the enlarged issued share capital that will be made available for application, and an offer for sale of up to 43.33 million shares at 50 sen each.

It noted that the selling shareholders for Pecca Group are Pecca’s executive chairman and group managing director Datuk Teoh Hwa Cheng and MRZ Leather Holdings Sdn Bhd.

Teoh and MRZ Leather have stakes of 4.36% or 8.2 million shares and 18.69% or 35.13 million shares, respectively.

“The authorised share capital of our group is RM250 million divided into 500 million shares and the issued and the fully paid-up share capital of our group is RM70.1 million comprising 140.2 million shares,” said Pecca Group.

Upon the allotment and issue of the public issued shares pursuant to the IPO, the company’s enlarged issued and paid-up capital will be RM94 million comprising 188 million shares, it said.

Some 18.8 million offer shares, representing 10% of the enlarged share capital, will be made available for bumiputera investors approved by the Ministry of International Trade and Industry.

Pecca Group comprises three subsidiaries namely Pecca Leather Sdn Bhd, PAviation and Everest Empire Sdn Bhd.

Based on the proforma consolidated income statements for the past three years, the Pecca Group posted revenue of RM62.13 million for the financial year ended June 30, 2012 (FY12), RM66.10 million for FY13 and RM99.55 million for FY14, while gross profits were RM20.02 million (FY12), RM23.29 million (FY13) and RM29.35 million (FY14).

Pecca Group said one of the purposes of the IPO is to enable the group to gain recognition and enhance its profile through its listing status.

“It will also help to provide additional funds to meet the working capital requirements of the group ... Our future plans are focused on the expansion of the group’s facilities to cater for [an] anticipated increase in sales volume, expansion into the aviation leather upholstery industry and penetration into the replacement equipment manufacturer retail industry by opening our own retail outlets,” it said.

 

This article first appeared in The Edge Financial Daily, on January 12, 2015.

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