KUALA LUMPUR (March 5): Aluminium supplier AMS Advanced Material Bhd has inked a retail underwriting agreement with M & A Securities Sdn Bhd for its initial public offering (IPO) and listing on the ACE Market of Bursa Malaysia.
The IPO will involve a public issue of 113 million new shares and an offer for sale of 47 million existing shares, according to AMS’s statement on Thursday.
Of the new shares, 30.6 million shares will be made available to the Malaysian public, while 2.16 million shares are reserved for eligible persons.
Another 76.5 million shares will be placed out to Bumiputera investors approved by the Ministry of Investment, Trade and Industry, while 3.74 million shares will be allocated to selected investors — both will also be done via private placement.
Under the underwriting agreement, M&A Securities will underwrite 32.76 million shares, representing the portion allocated to the Malaysian public and eligible persons.
Incorporated in 2023, AMS Advanced Material is principally involved in the trading of semi-finished aluminium and copper products as well as the processing of semi-finished aluminium products.
It operates mainly in Malaysia and Singapore, focusing on trading and processing activities such as shearing, tooling and rework to meet customer specifications, serving customers across the semiconductor, automotive, construction, aerospace and consumer goods industries.
The company’s risk factors include concentration on both ends of its value chain. One major customer contributed between 20% and 47% of sales over the last three financial years, while on the supply side, AMS Advanced Material relies heavily on two principal vendors for aluminium purchases.
In addition, AMS Advanced Material does not have long-term contracts with its customers, with sales largely dependent on recurring purchase orders.
Proceeds from the IPO will be used to set up a licensed manufacturing warehouse and office in Penang, expand the group’s aluminium architectural products manufacturing segment, establish a new distribution point in Kuantan, and repay borrowings, among other uses.
According to an independent market research report, the aluminium industry is expected to grow at a compounded annual growth rate of 6.39%, reaching RM 10.74 billion by 2029, AMS Advanced Material managing director Keh Teng Yang said in the statement.
Keh said growth is promising in high-value markets like aerospace, semiconductors, engineering support, automotive, construction and consumer products.
He added that the company’s listing will help improve operations, boost efficiency and support long-term growth.
M&A Securities is acting as principal adviser, sponsor, underwriter and placement agent for the IPO exercise.
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