KUALA LUMPUR (March 19): Geotechnical services firm Fibromat (M) Bhd said on Wednesday it has signed an agreement for M&A Securities to underwrite its initial public offering (IPO) on the ACE Market.

Fibromat is targeting to launch the IPO, part of its listing transfer from the LEAP Market, by the second quarter this year, the company said in a statement. Under the agreement, M&A Securities will underwrite the shares set aside for the Malaysian public and eligible persons under the pink form allocations.

“This comes at an opportune time as we are ready to take advantage of the vast opportunities and vibrancy in Malaysia’s infrastructure construction and property development industry,” said Fibromat chief executive officer Ng Kian Boon.

Based in Selangor, the company specialises in erosion control, ground improvement, as well as sediment control, filtration and containment lining. Last year, the company made a net profit of RM8.49 million, on revenue of RM68.3 million.

The proposed IPO involves a public issue of 32.28 million new shares and an offer for sale of 24.83 million existing shares at a price to be determined later.

Funds raised during its listing on the LEAP Market in May 2019 have been depleted, and the company plans to use the fresh proceeds to buy additional machinery to supplement existing fleet and scale up operations to facilitate the anticipated growth, Fibromat said in its draft prospectus.

The additional stitching machines for its Rasa factory will allow the company to more than double the current capacity and produce up to 101,340 rolls of erosion-control blanket annually, Fibromat said. On its shopping list is also a dust collector, to be connected to the stitching machine.

Further, the company plans to acquire hydraulic excavators to expand its in-house capabilities to include installation of prefabricated vertical drain. The rest will be used as working capital and to defray listing expenses.

The family-managed company has 40 ongoing projects with contract value of RM178.7 million, of which RM51.7 million remains unbilled at the end of 2024.

Under the public issue, 12.41 million shares are allocated to the Malaysian public and 6.21 million shares to eligible persons. The company is also setting aside 13.66 million shares for Bumiputera investors through private placement.

The offer for sale, meanwhile, involves a private placement of 17.38 million existing shares to Bumiputera investors, and 7.45 million shares to select investors.

Any proceeds from the sale of existing shares will accrue entirely to Kian Boon, whose holdings will be reduced to 63.7% from a little under 85% currently. His sons Ng Chun Hou and Ng Chun Yew are Fibromat’s executive director and senior operation manager, respectively.

M&A Securities is the adviser, sponsor, underwriter and placement agent for the IPO.

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