KUALA LUMPUR (Nov 26): Aluminium products manufacturer Winstar Capital Bhd has launched the prospectus for its ACE Market initial public offering (IPO), aiming to raise up to RM25.88 million to purchase new machinery and equipment to expand its manufacturing capacity.
Gross proceeds from the public issue will amount to RM19.79 million, which will be utilised by the group mainly for expansion. The rest of the amount raised, via an offer for sale, will go to the selling shareholders, including Winstar executive vice chairman Chua Nyok Chong and chief executive officer Chua Boon Hong.
The IPO, priced at 35 sen per share, involves the issuance of 56.55 million new shares and the offer for sale of 17.4 million existing shares, according to the prospectus launched on Tuesday.
This will collectively offer a 25.5% stake in the company post-listing.
The IPO application closes on Dec 3, with Winstar scheduled to debut on Bursa Malaysia's ACE Market on Dec 19.
Winstar Capital specialises in the extrusion of aluminium profiles and the fabrication of aluminium ladders, solar photovoltaic (PV) mounting structures, and related accessories. The company also engages in the trading and distribution of building materials and provides solar PV installation services.
Winstar Capital is backed by renewable energy firm Sunview Group Bhd (KL:SUNVIEW) with a 30% stake through its wholly owned subsidiary, Vafe System Sdn Bhd. Following the IPO, Sunview’s stake in Winstar will be diluted to 24.15%.
At the IPO price of 35 sen per share, Winstar Capital would have a market capitalisation of RM101.5 million, based on its enlarged share capital of 290 million shares. This values the company at a price-to-earnings (P/E) ratio of 12 times its financial year ended Dec 31, 2023 (FY2023) earnings.
For FY2023, Winstar reported a profit after tax of RM8.02 million on revenue of RM153.69 million.
Under the IPO, Winstar will offer 14.5 million new shares to the public, 15.95 million shares to eligible persons, and 26.1 million shares to selected investors via private placement.
The company has allocated nearly half of the public issue proceeds, RM9.55 million, for capital expenditure for the purchase of a new aluminium extrusion press machine and related equipment.
The remaining funds will be allocated as follows: RM6.24 million for working capital requirements and the balance RM4 million for listing-related expenses.
Meanwhile, the offer-for-sale shares will be placed out privately, and the proceeds raised, RM6.09 million, will accrue to the selling shareholders.
Nyok Chong will see his shareholding reduced to 26.02% from 36.18% after selling nearly nine million shares under the offer for sale, while Boon Hong will be left with 8.63% after the IPO, from 12%.
Post-IPO, director Lee Yong Zhi's shareholding will also be reduced to 8.47% while chief marketing officer Khoo Nee Cheng's stake will be reduced to 7.23%.
TA Securities Holdings Bhd is the principal adviser, sponsor, sole placement agent, and sole underwriter for the IPO. Eco Asia Capital Advisory Sdn Bhd acts as the financial adviser.
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