KUALA LUMPUR (March 15): IT services firm Vetece Holdings Bhd is planning an initial public offering (IPO) on the ACE Market on Bursa Malaysia to seek funds for expansion.

The IPO is expected to involve a public issuance of 98 million new shares and an offer for sale of 39.2 million existing shares at a price to be determined later, according to a draft prospectus filed with Bursa Malaysia. In total, the IPO offers a 35% stake in the company.

Under the public issue, 19.6 million shares will be made available to the Malaysian public while 9.8 million shares have been set aside for eligible persons and the remaining 68.6 million shares will be privately placed to select investors.

The offer-for-sale shares meanwhile will be sold by executive chairman Tee Chee Chiang and chief executive Chan Wai Hoong to select investors through private placement.

Proceeds from the IPO have been earmarked for the roll-out of new core products and services, hiring of staff and equipment purchase in Singapore, setting up a centre-of-excellence for software development, and to pay for hardware and software licensing fee.

The company also plans to use funds to repay bank borrowings and defray listing expenses.

Vetece has been in the enterprise IT services industry for over 20 years, providing implementation and maintenance, support and professional services, and the resale of hardware and software with clients in countries from Australia to Papua New Guinea, and from India to South Korea.

On the financial front, Vetece’s earnings have risen over the past three financial years with net profit of RM6.56 million in the financial year of 2023 (FY2023) versus RM4.15 million in FY2022 and RM3.14 million FY2021.

Revenue meanwhile has grown to RM23.13 million in FY2023 from RM20.84 million in FY2022 and RM20.05 million in FY2021.

Kenanga Investment Bank Bhd is the principal adviser for the IPO.