Sunday 06 Oct 2024
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KUALA LUMPUR (April 9): Mega Fortris Bhd, partly backed by Singapore’s Oversea-Chinese Banking Corporation (OCBC), has filed for its initial public offering on the Main Market to raise funds for expansion, including for new production facilities in the United Kingdom.

The proposed IPO involves a public issue of 147.87 million new shares and an offer-for-sale of up to 147.87 million existing shares, according to the draft prospectus filed with Securities Commission Malaysia. All in all, the listing offers investors up to 35% in the company that manufactures security seals.

“We intend to decentralise our manufacturing capacity and grow our business in foreign countries by setting up new production facilities for security seals, including automated production lines” in the UK, to service customers in the Europe, Americas, Middle East and Africa regions, Mega Fortris said in the draft prospectus.

Further, the company also plans to venture into a new business to supply and handle playing cards in sealed security boxes in Macao, it said. The rest will be used as working capital and to defray listing expenses.

Mega Fortris manufactures up to 530 million pieces of security seals annually, which are used on boxes of playing cards, containers and cables, to prevent tampering and secure goods during transportation and storage.

The company claims that its products are used in about 120 countries and currently serves 38 casino operators in Macau, the Philippines, Vietnam, Cambodia and other countries for their security seals.

OCBC has a 9.45% stake in Mega Fortris’ holding company and sole selling shareholder Mega Fortris Global Pte Ltd. The second-largest bank in Southeast Asia by assets also has another 16.54% indirect stake through its vehicle Lion-OCBC Capital Asia I Holding Pte Ltd, which is held for investments and is not involved in day-to-day company operations and management. 

Net profit nearly tripled to RM12.5 million on revenue of RM161.30 million in the financial year ended Jun 30, 2023, the draft prospectus showed. Margin on earnings before interest, tax, depreciation and amortisation, a measure of the company's operating profit as a percentage of its revenue, expanded to nearly 20% from 13% a year earlier.

The public issue of the IPO will allocate 42.25 million shares to the Malaysian public and 25.35 million shares to eligible persons, as well as 38.02 million shares to Bumiputera investors, and 42.25 million shares to institutional and select investors through private placement.

Meanwhile, the offer-for-sale tranche will involve 80.27 million existing shares to institutional and select investors, and another 67.6 million shares to Bumiputera investors through private placement.

Proceeds from the sale of existing shares will go entirely to the selling shareholders, including Mega Fortris chairman Datuk Nick Ng, and his brother Datuk Adrian Ng, who is also the company’s chief executive officer.

RHB Investment Bank is the sole principal adviser, and joint underwriter and placement agent alongside AmInvestment Bank for the IPO.

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