KUALA LUMPUR (Oct 21): Mega Fortris Bhd, partly backed by Singapore’s Oversea-Chinese Banking Corporation (OCBC), has launched an initial public offering (IPO) to raise more than RM198 million on the Main Market.
The IPO, priced at 67 sen per share, 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 its prospectus unveiled on Monday. All in all, the listing offers investors up to 35% in the company that manufactures security seals.
Applications for the IPO shares will close on Oct 28 and listing has been scheduled for Nov 11.
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.
At the IPO price, Mega Fortris would have a market capitalisation of RM566.13 million, valuing the company at about 29 times its earnings for the financial year ended June 2024.
Out of the total of RM99.07 million to be raised from the public issue, Mega Fortris plans to use 43% of the proceeds to establish a new factory in the UK. The company has also earmarked 45% of the funds raised for its new business to supply playing cards in sealed security boxes in Macau.
The rest will be used as working capital and to defray listing expenses.
The sale of existing shares under the offer for sale, which could raise up to RM99.07 million, will accrue entirely to a private vehicle controlled by 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 as well as the joint underwriter and placement agent alongside AmInvestment Bank for the IPO.