KUALA LUMPUR (Nov 7): TMK Chemical Bhd said it has signed a retail underwriting agreement with Maybank Investment Bank Bhd in conjunction with the chemical company's initial public offering (IPO) on the Main Market of Bursa Malaysia.

Maybank will underwrite a total of 30 million shares to be offered to the Malaysian public, TMK said in a statement on Thursday.

“This milestone marks an exciting opportunity for growth, and we look forward to building strong, lasting relationships with our new shareholders as we work together to achieve our vision for TMK,” said TMK managing director Wong Kin Wah.

The IPO, scheduled to take place in the fourth quarter of 2024, involves the issuance of 220 million new shares, representing 22% of the company’s enlarged share capital of one billion shares, at a price to be determined later. There is no separate sale of existing shares.

The IPO includes an institutional tranche of 190 million new shares to institutional and select investors through bookbuilding.

Founded in 1989, TMK is currently controlled by Datuk Lee Soon Hian, the youngest of the billionaire Lee brothers of plantation giant Kuala Lumpur Kepong (KL:KLK). He owns a 50.6% stake in the company.

TMK provides sourcing, processing and distribution of acids, alkalis, salts and other chemical products. The company began manufacturing chlor-alkali derivatives, such as sodium hydroxide or caustic soda used in making of soap and detergents, at its Banting plant in May.

The company operates out of Malaysia, Singapore and Vietnam, and also provides bulk storage services for liquid chemicals at terminals in Pasir Gudang and Kemaman.

For the financial year ended Dec 31, 2023, TMK made a net profit of RM91.6 million on revenue of RM1.31 billion.

According to its prospectus exposure, TMK plans to use the proceeds raised from IPO to expand the plant at Banting, construct a new facility in Singapore and partly repay its borrowings of RM250 million.

The company also intends to use the proceeds for acquisitions and investments in inorganic chemicals or a similar industry, and allocate some to meet its working capital requirements.
 
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