By RAHIMI YUNUS
Techbond Group Bhd aims to raise RM39.7 million through listing on Bursa Malaysia’s Main Market next month.
The industrial adhesives and sealants manufacturer will issue 60.11 million new shares at an issue price of 66 sen a piece, that comprises 11.5 million units to the Malaysian public and 19.6 million units for selected investors via private placement.
Additionally, 23 million shares will be available for Bumiputera investors approved by the Ministry of International Trade and Industry through private placement and the remaining six million shares are placed for the directors and employees.
The group sets to have an enlarged issued share capital of 230 million shares with a market capitalisation of RM152 million through listing on Dec 5.
“We would continue to capitalise on our strengths to generate sustainable revenue from our existing businesses.
“We believe our strong fundamentals will put us in good stead and we are confident that we can deliver commendable performance in the coming years,” MD Lee Seng Thye said at the company’s prospectus launch in Kuala Lumpur yesterday.
Techbond’s industrial adhesives are used in a range of products and applications such as woodworking; paper and paper packaging; building and construction; automotive; cigarettes and cigarette packs; personal care products; and mattresses.
The company owns brands such as Starbond, Komotech, Innomelt and Econails.
Lee said the company intended to use about 72.5% of the proceeds raised from the listing exercise for the operational expansion in Vietnam which includes building a new plant to increase capacity.
At present, Techbond has one factory complex in Shah Alam, Selangor, that manufactures water-based and hot melt adhesives, and another factory complex in Binh Duong Province, Vietnam, that produces water-based adhesives.
Both operations in Malaysia and Vietnam have a combined annual capacity of 17,878 tonnes of industrial adhesives and 3,494 tonnes of industrial sealants, according to the prospectus.
Lee said its Vietnam operation currently contributes 60% to the group revenue, while the remaining 40% comes from local operations.
He added that about 80% of its products are exported to countries such as Cambodia, Indonesia, China, India and few others.
For the financial year ended 2018 (FY18), Techbond recorded revenue of RM86.8 million and a gross profit of RM25.4 million, giving it a gross profit margin of 29.3%.
Cash and cash equivalents as at the end of FY18 stood at RM36.7 million.
Techbond posted a profit after tax of RM11.7 million in FY16, RM14.5 million in FY17 and RM13.4 million in FY18.
Application for the public issue of the initial public offering was opened from yesterday (Nov 13) and will close on Nov 23.