CEKD to utilise IPO proceeds for assets acquisitions, banks repayments

The forthcoming listing will further strengthen the die-cutting solutions provider and manufacturer foothold in the industry

by NUR HAZIQAH A MALEK / Pic credit: sharetisfy.com

DIE-CUTTING solutions provider and moulds manufacturer CEKD Bhd has launched its prospectus for the Initial Public Offering (IPO), aiming to raise RM24.28 million from its upcoming listing.

CEKD MD Yap Kai Ning said 36.2% or RM8.8 million from the proceeds raised will be used to buy a factory for Hotstar (M) Sdn Bhd, one of its three wholly-owned subsidiaries located in Kepong, Kuala Lumpur.

“The proceeds from the IPO will also go towards acquiring laser-cutting machines and automatic steel rule processors to support business expansion and increase our production efficiency.

“Our production capability will be enhanced with the upgrading of our computer software and servers and this will support business growth,” she said after the virtual prospectus launch yesterday.

She detailed that a total of RM4.3 million of the IPO proceeds will go into capital expenditure (capex), which would comprise of new machineries’ purchase and computer software and server’s upgrade and development.

Some RM4 million will be used to repay bank borrowings while the remaining will go into marketing activities, general working capital and estimated listing expenses. Yap said the forthcoming listing, scheduled for Sept 29 on the ACE market, marks a significant milestone in the group’s history.

“The IPO will not only strengthen our presence in the industry as a leading die-cutting solutions provider and manufacturer but also raise our profile to help us in our expansion plans.

“This IPO will help us leverage on our integrated business model alongside our three wholly owned subsidiaries, Sharp Die Cutting Mould Sdn Bhd, Hotstar and Focuswin Diecutting Mould Sdn Bhd, while allowing us to fortify our presence in the industry as a leading provider and manufacturer of custom die-cutting solutions, as well as a trader of related consumables, tools and accessories,” she said.

The group’s advisor, sponsor, sole underwriter and placement agent in relation to the IPO is M&A Securities Sdn Bhd.

M&A Securities corporate finance MD Datuk Bill Tan said the IPO has received a positive response from investors.

“We are pleased to play a significant role in its goal to become a publicly listed company, as this milestone today is the result of the hard work and dedication of the CEKD team.

“They are experienced and committed with operational expertise and in-depth knowledge of the manufacturing of die-cutting moulds and trading of related consumables, tools and accessories. The IPO will strengthen CEKD’s foothold in the industry,” he said.

The IPO involved the public issuance of 50.59 million new shares at an issue price of 48 sen per share, with 9.73 million new shares of the total available for application to the Malaysian public.

Another 9.73 million new shares will be allocated for application by eligible directors, employees and persons who have contributed to the group’s success.

In addition, 6.81 million new shares will be sold by way of private placement to selected investors while 24.32 million shares by way of private placement to Bumiputera investors approved by the Ministry of International Trade and Industry.

CEKD began operating in 1989, and has since leveraged on the domestic automotive industry’s boom by supplying different types of moulds and dies, and extended its business into manufacturing of die-cutting moulds to cater the demand for high-end die-cutting mould products.

The financial period ended March 31, 2021, saw the company post a revenue of RM17.71 million and a gross profit at RM9.25 million.

Its profit after tax stood at RM4.02 million or basic earnings per share of 2.79 sen with a 0.3 gearing ratio.