Betamek aims to raise RM33.8m from IPO

The EMS provider will use the fund for R&D activities, assets acquisition, loan repayment, general working capital and listing expenses

by SHAFIQQUL ALIFF / pic courtesy of Betamek

BETAMEK Bhd expects to raise RM33.8 million under its IPO exercise on the ACE Market of Bursa Malaysia Securities Bhd and issue 67.5 million new shares, representing 15% of the enlarged share capital at an issue price of RM0.50 per share.

Betamek is an electronic manufacturing services (EMS) provider specialising in the design and development, procurement and manufacturing of customised electronics and components for the automotive industry. 

The group said of the 67.5 million new shares, 22.5 million new shares will be made available to the Malaysian public via balloting; 13.5 million new shares are eligible to directors, employees and persons who have contributed to the success of Betamek under pink form allocations while the remaining 31.5 million new shares are earmarked for private placement to selected investors.

“The existing shareholders of the company, Iskandar Holdings Sdn Bhd, will also make an offer for the sale of 45 million existing shares to selected investors by way of the private placement, as part of its listing exercise,” Betamek said in a statement today. 

Based on the enlarged share capital of 450 million shares, Betamek is expected to have a market capitalisation of RM225 million. 

The company said it plans to use RM7 million (20.7%) from its listing exercise to fund the research and development (R&D) activities for new product development, RM6.5 million (19.3%) to further expand its R&D office space, raw material storage and ancillary facilities to cater to its future growth, as well as for future R&D activities, and RM3 million (8.9%) for machinery and equipment acquisition for its existing factory in Rawang to enhance its manufacturing efficiency and capabilities. 

The remainder of the proceeds will be used for the repayment of bank borrowings amounting to RM10 million (29.6%), RM3.9 million (11.4%) for general working capital while the remaining RM3.4 million (10.1%) to defray the estimated listing expenses. 

Betamek MD Mirzan Mahathir said the group is set to benefit from the pent-up demand for new vehicles and the launch of new car models by its key automotive client, and they have gained a reputation as a reliable manufacturer and direct supplier of quality vehicle electronics and accessories to automotive makers over the years. 

“Our end-to-end EMS solutions for automotive makers enable us to support the automotive industry value chain as we undertake product R&D, prototyping, board assembly, electronics, and mechanical assembly, testing, labelling, packaging and support services for automotive marques.

“Continuing our growth journey, we plan to expand our range of product offerings relating to automotive electronics for future automobile models and variants. This allows us to capture a larger market share in the automotive EMS industry going forward,” he said. 

Mirzan added that the company is in a discussion with its technology partners to develop and introduce more innovative technologies and new product solutions that have market potential.

“Over the years, we have been expanding our product portfolio by including new automotive electronic solutions and technologies required to complement the features of our products.

“As a hybrid, electric and autonomous vehicles gain global market share, Betamek is in a unique position to leverage this growing market trend and expand and diversify our product offerings with competitive solutions that incorporate the innovative Malaysian DNA.

“Today’s vehicle infotainment system entails the evolution of the vehicle-stereo technology alongside elements of audio and video, Internet of Things (IoT), GPS and navigation capabilities as well as vehicle safety and security.

“We consider that there are still many untapped opportunities for product segments with advanced driver assistance systems, entertainment, connectivity, IoT and vehicles accessories. This IPO exercise will be a great boost to our future R&D activities,” he added.  

Meanwhile, the group CFO Nor’ Azrin Nusi said they are optimistic about delivering strong earnings in the upcoming financial quarters as most of its revenues are derived from its major customer Perusahaan Otomobil Kedua Sendirian Bhd (Perodua). 

“We are optimistic and our revenues are derived from our major customer, Perodua, which is delivering more units to the market. As long as Perodua delivers, we will deliver. We have consistently performed as Perodua’s best suppliers on cost, quality and delivery,” he added. 

Meanwhile, Betamek COO Megat Iskandar Hashim Ismail said the group sees less impact from the weakening ringgit against the US dollar and supply chain issue as they said the group is very strong.

He said the company has cultivated several local suppliers and continues to be on their list of approval as well as the company suppliers from overseas in Hong Kong, Taiwan, Japan and China.

“We have managed to handle the situation through post-Brexit collaboration with our customers. Even during the global shortage of raw material supply, our R&D team are able to look for alternative components as replacement immediately. 

“We have a 100% track record on delivery to our customers during this shortage without disruption,” he added.