KUALA LUMPUR (Jan 14): Powertechnic Group Bhd, which provides lifting systems as well as maintenance and repair services, on Tuesday (Jan 14) filed for an initial public offering (IPO) on the ACE Market of Bursa Malaysia to raise funds for marketing expenses and capital expenditure for automated machines.

The proposed IPO involves a public issue of 63 million new shares and an offer-for-sale of 21 million existing shares at a price to be determined later, according to its draft prospectus filed with the stock exchange. The listing offers investors up to a 27.1% stake in the company based on its enlarged issued share capital of 310.34 million.

The Johor-based company is a specialist in lifting systems, including cranes and hoists, elevated platforms and elevators for the industrial, commercial and residential markets. The company also has a presence in Singapore.

For its financial year ended Dec 31, 2023, the company made a net profit of RM4.24 million on the back of RM30.62 million in revenue. Gross profit margin was 42.85% while profit before tax margin was 19.22%.

Under the proposed public issue, the company has set aside 15.6 million new shares for the public and 10 million shares for eligible persons. Meanwhile, 19.6 million shares are allocated to selected investors and another 17.8 million new shares to Bumiputera investors, both via private placement.

Proceeds from the public issue have been earmarked for the product showrooms and sales offices with storage space and marketing expenses, capital expenditure for automated machines, bank borrowing, working capital and listing expenses.

Funds raised from the offer-for-sale through private placement to select investors will accrue entirely to the selling shareholders, namely its managing director Ivan Na Keh Chai and executive director Choo Chee Yong.

Na and Choo currently hold a 48.01% stake each in Powertechnic. Post-IPO, both Na and Choo's stake in the company will be diluted to 34.88% each.

TA Securities Holdings Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.