KUALA LUMPUR (July 15): Automotive manufacturer parts supplier KHPT Holdings Bhd has received approval from Bursa Malaysia for its initial public offering (IPO) on the ACE Market.

The approval marks another step forward for the company that makes body parts, seat structure, and other parts, such as absorbers and drive plates, since it filed its draft prospectus with Bursa Malaysia on April 4, 2024.

“The proceeds from the IPO will facilitate our business expansion by financing our capital expenditure and working capital requirements,” said managing director Eloise See. “Amongst others, the purchase of new press machines and automation equipment will enable us to increase our manufacturing capacity and efficiency.”

The addition of a new manufacturing line will also provide “further flexibility in our manufacturing of different automotive parts which we provide to our customers”, she added.

The proposed IPO involves a public issue of 108.64 million new ordinary shares and an offer for sale of 38.23 million existing shares at a price to be determined later. All in all, the listing offers investors up to a 36% stake in the company, a tier 1 manufacturer that sells to Proton and Perodua.

The company is also a tier 2 supplier, selling spare parts for service, repair and maintenance of used vehicles in the replacement market. In the financial year ended Dec 31, 2023, the company reported a net profit of RM5.53 million on revenue of RM114.08 million.

Under the public issue, KHPT will make 20.12 million new shares available for the public and 10.06 million shares for eligible persons. The company will also set aside 78.47 million shares for select investors through private placement.

KHPT has earmarked part of the proceeds for the purchase of four press machines to set up a new body parts production line that will increase its capacity by more than 2.62 million pieces a year, up 83% to 5.77 million pieces annually.

Some of the proceeds will also go towards installing the automation equipment into the new body parts production line, renovating its Telok Panglima Garang factory to accommodate the new production line, and an overhead crane.

The rest will be used as working capital and to defray listing expenses.

The offer for sale of existing shares, meanwhile, will be done through private placement to select investors, and proceeds will accrue entirely to selling shareholders See and Tiu Kuang Hong, a technical director at one of KHPT’s subsidiaries.

KAF Investment Bank is the principal adviser, sponsor, sole underwriter and sole placement agent for the IPO.