KUALA LUMPUR (Sept 2): Chemlite Innovation Bhd, which provides surface finishing treatment services, has filed for an initial public offering (IPO) on the ACE Market to raise funds mainly for a new facility.
The proposed IPO involves a public issue of 120 million new shares and an offer-for-sale of 60 million shares at a price to be determined later, according to the draft prospectus. All in all, the listing offers investors up to 30% stake in the company.
“We intend to scale up our operations to support our business in the next three years by strengthening our operational capabilities,” Chemlite said, noting that its current facility at Penang Science Park is operating near to full capacity.
The new facility is expected to house at least four fully automated anodising lines and four semi-automated metal plating lines, and Chemlite said it plans to acquire a 3.41-acre land in Penang for RM9.67 million for the facility.
Penang-based Chemlite specialise in metal plating services on intermediate metal products with expertise in multi-layer metal coatings. The company also provides non-metal plating services on intermediate metal products, including anodising and other non-metal plating services.
The company, which mainly caters to the semiconductor and electronics industries, said it expects demand for its services backed by rising need for miniaturised technologies, rising popularity of electronic devices, and adoption of technologies such as Internet of Things and cloud computing.
In the first six months of 2024, Chemlite made a net profit of RM4.23 million on revenue of RM16.98 million.
Under the public issue, Chemlite is allocating 30 million new shares to the Malaysian public and 21 million shares to eligible persons. The company is also setting aside 69 million shares to select investors through private placement.
The company is also planning to set up two cleanrooms to provide cleaning and packaging services and its new and existing customers will no longer need to send treated intermediate metal products to third-party service providers for such services, it said.
Proceeds from the IPO will also be used for capital expenditure on machinery and equipment, establishing a research and development department, as well as for partial repayment of bank borrowings, meeting working capital requirements, and to defray listing expenses.
Chemlite is currently owned by chief executive officer Chong Yuen Fong with a 55% stake and his co-founder and chief operating officer Heng Chee Khiang with 45%. Post-listing, Chong’s stake will be trimmed to 38.5% while Heng’s direct holdings will be diluted to 31.5%.
Any proceeds from the offer for sale through private placement meanwhile will accrue entirely to Chong and Heng.
UOB Kay Hian is the IPO’s principal adviser, sponsor, underwriter and placement agent.