KUALA LUMPUR (April 18): Feytech Holdings Berhad (Feytech) has entered into an underwriting agreement with TA Securities Holdings Berhad and AmInvestment Bank Berhad (joint underwriters) for the company’s Initial Public Offering (IPO) on the Main Market of Bursa Malaysia Securities Berhad.

In a statement on Thursday, Feytech, which is mainly an automotive cover and seat manufacturer, said its customers in the original equipment manufacturer (OEM) market segment comprises automotive vehicle OEMs such as Mazda Malaysia (for Mazda 3, CX-5, CX-8 and CX-30 car models) and Kia Malaysia (for Kia Carnival and Sorento car models), as well as Tier 1 automotive seat and/or interior part manufacturers which serve local automotive vehicle OEMs, such as Mazda and Hyundai.

Feytech also manufactures automotive covers for the pre-delivery inspection and replacement equipment manufacturer market segments, which comprise automotive distributors, car owners, used car dealers, importers, automotive dealers, car accessory retailers and automotive cover installers.

The IPO entails a public issue of 143.32 million new ordinary shares and an offer for sale of 109.62 million existing shares.

Of the 143.32 million public issue shares, 42.16 million shares will be made available to the Malaysian public via balloting, 25.29 million shares will be allocated to the eligible directors, employees and persons who have contributed to the success of Feytech, while the remaining 75. 87 million shares will be allocated by way of private placement to selected investors.

Meanwhile, out of the 109.62 million existing ordinary shares offered for sale, 105.40 million will be allocated by way of private placement for Bumiputera investors approved by Ministry of Investment, Trade and Industry while 4.22 million existing ordinary shares will be allocated by way of private placement to selected investors.

Pursuant to the underwriting agreement, the joint underwriters will underwrite a total of 67.46 million shares, being the portion new Feytech shares made available to the Malaysian public via balloting and eligible directors and employees as well as persons who have contributed to the success of Feytech Group.

Proceeds from the IPO will be utilised to part finance the acquisition of land and construction of a new corporate office with manufacturing plant and warehouse in Klang Valley with an approximately built-up area of 85,000 sq ft.

Upon the completion of the new corporate office with manufacturing plant and warehouse, Feytech Group intends to relocate all its existing operations in Petaling Jaya to its new corporate premises.

In addition, part of the proceeds from the IPO will be used to construct a new manufacturing plant, warehouse, annex office building and staff hostel on a part of a vacant industrial land in Pekan Sungai Karangan, Kedah — dubbed Kulim Plant 2 — with a total estimated built-up area of 84,000 sq ft.

The total manufacturing space and storage space for Feytech Group’s manufacturing of automotive seats is expected to increase by approximately 55,000 sq ft upon completion of the construction of Kulim Plant 2.

Feytech will also utilise part of the IPO proceeds to purchase new machineries which include 75 sewing machines, an automated leather cutting machine and a patterning machine, as well as materials and supplies and finance general working capital.

Feytech executive director cum chief executive officer Connie Go said the IPO proceeds will assist in the group’s expansion locally where it hopes to grow and expand its services to existing and target customers within the region.

Meanwhile, Tah Heong Beng, TA Securities executive director of operations, said the signing enables Feytech to further solidify its commitment to delivering top-quality automotive covers globally.

“We are excited to contribute to the continued success and growth of Feytech Holdings in the international market,” said Tan.

For the financial year ended 2022, Feytech posted a net profit RM27.69 million on the back of revenue RM126.88 million.

Earnings per share was 3.9 sen (pre-IPO) and 3.3 sen (post-IPO).

Besides acting as a joint underwriter, TA Securities is also the principal adviser, managing uderwriter and joint placement agent for this exercise.

AmInvestment Bank is the joint underwriter and joint placement agent for Feytech Holdings’ IPO.