KUALA LUMPUR (March 6): Calcium carbonate producer Zantat Holdings Bhd began taking orders from investors for its initial public offering (IPO) on Wednesday, to raise up to RM18.20 million.
The IPO, priced at 25 sen per share, involves a public issue of 56.0 million new shares, representing 20% of the enlarged share capital of Zantat and an offer for sale of 16.8 million existing shares by way of private placement to selected investors, according to its prospectus.
The offering will close on March 13, and the listing is scheduled for March 27.
Zantat produces ground calcium carbonate and calcium carbonate dispersions that are mainly used in the manufacturing of plastic masterbatch, rubber gloves, PVC pipes and cables, and in other products such as paints and coatings.
The sale of new shares is expected to raise total proceeds of RM14.00 million, of which 27% will be used for upgrading its research-and-development facilities. The company has also earmarked 7.2% to upgrade its Calrock Perak plant’s infrastructure and 9.6% for investment in machine components and industrial automation.
The upgrading of R&D facilities is crucial to facilitate the company’s product expansion plan, according to its managing director Ivan Chan.
"With the upgraded R&D facility and enhanced testing capabilities, we will be focusing on our in-house product development and enhancement including testing of our products as well as for new and existing customers pertaining to our calcium carbonate products and bioplastic compounds.
“As part of our strategy to expand our product range, we intend to develop three new bioplastic compounds and enhance our ultrafine grade ground calcium carbonate namely “Zanelite” series and produce more varieties to generate new revenue stream,” Chan said in a statement.
The remainder of the IPO proceeds will be set aside for repayment of bank borrowings, working capital, and to defray listing expenses.
Meanwhile, the offer-for-sale of existing shares will gross RM4.20 million, which will accrue entirely to the existing shareholders of Zantat, including deputy chairman Chan Hup Ooi and managing director Chan Bin Iuan.
Out of 56.0 million issued shares, 14.0 million will be made available to the Malaysian public via balloting, 11.2 million issue shares for its eligible directors, employees and persons who have contributed to the success of the Zantat under pink form allocations, while the remaining 30.8 million issued shares are reserved for private placement to selected investors.
M&A Securities will underwrite a total of 25.2 million issued shares made available to the Malaysian public and pink form allocations.
M&A Securities is the adviser, sponsor, underwriter and placement agent for the IPO exercise.