KUALA LUMPUR: Electronics manufacturing services Betamek Bhd, en route to a listing on Bursa Malaysia’s ACE Market on Oct 26, plans to raise RM33.8 million from its initial public offering (IPO) for business expansion.
At an issue price of 50 sen per share, the IPO entails an issuance of 67.5 million new shares. Upon listing, this is expected to represent 15% of its enlarged share capital of 450 million shares and a market capitalisation of RM225 million.
Of the 67.5 million new shares, 22.5 million (33.3%) will be made available to the Malaysian public via balloting; 13.5 million (20.0%) will be for its eligible directors, employees and persons who have contributed to the success of Betamek Group; and the remaining 31.5 million (46.7%) are earmarked for private placement to selected investors. The existing shareholders of the company, Iskandar Holdings Sdn Bhd, will make an offer for sale of 45 million existing shares to selected investors by way of private placement.
Betamek plans to use RM7 million (20.7%) raised from the IPO to fund research and development (R&D) for new products and RM6.5 million (19.3%) to expand its R&D office space, raw material storage and ancillary facilities to cater for future growth, as well as for future R&D activities. A further RM3 million (8.9%) of the proceeds will be used to acquire machinery and equipment for its existing factory in Rawang, Selangor, to enhance its manufacturing efficiency and capabilities.
The rest of the proceeds will be used for repayment of bank borrowings amounting to RM10 million (29.6%), RM3.9 million (11.4%) for general working capital and RM3.4 million (10.1%) to defray estimated listing expenses.
Betamek COO Megat Iskandar Hashim Ismail said part of its plans is to use the proceeds of the IPO to expand its R&D activities so that it can offer a more diverse range of products to its customers. By doing so, the group hopes to generate additional revenue streams and more product lines to offer more unique solutions to customers.
“Our plan is to leverage the new technologies as the automotive industry moves towards hybrid and electric vehicles. We see this trend continuing for a few more years to come and as that happens, there is an increased need for more electronics in every vehicle. The plan is for Betamek to take advantage of our position in the industry and leverage these opportunities,” he told reporters at a press conference after the virtual launch of the company’s IPO prospectus today.
Over the years, Megat Iskandar Hashim said, the group has built a strong global supply chain. It has cultivated several local companies that continue to be among its approved suppliers, which include those from Hong Kong, Taiwan, Japan and China.
“Even during the global shortage of raw material supply, we managed to handle the situation through close collaboration with customers. The agility of our R&D team to look for alternative components to replace those in short supply ... we have a 100% track record on delivering to our customers during this global shortage of components period, without disruption,” he said, adding that the group does not face any labour issues at this time.
Betamek CFO Nor’ Azrin Nusi shared that Perusahaan Otomobil Kedua Sdn Bhd (Perodua) is one of its major customers and most of its revenue is derived from the latter.
“As long as Perodua delivers more units to the market it will indirectly impact our revenue. We are confident that as long as Perodua delivers, we will also deliver,” he said.
The IPO opened for subscription today and will close on Oct 7, 2022.
M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO.