KUALA LUMPUR (May 25): Eckem Holdings Bhd, an industrial chemicals distributor, on Monday began accepting applications from investors for its ACE Market listing that will raise RM22.5 million.
The initial public offering (IPO) is priced at 12 sen per share, according to its prospectus. The public issue of new shares will raise RM15 million for the company while the offer for sale of existing shares will gross another RM7.5 million combined for founder Tan Kwang Wah, his wife, and two sons.
Applications will close on June 19, and listing has been scheduled for July 3.
Headquartered in Shah Alam, Eckem mainly sells specialty industrial resins, pigments, and additives used in paints, construction materials, personal protective equipment, inks, household products, and adhesives.
The company also manufactures rubber products, including dental dams and latex sheets, as well as lifestyle products such as exercise bands. Last year, the company made a net profit of RM4.5 million on revenue of RM38.6 million.
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From left: Eckem Holdings Bhd executive director Tan Khai Jeik, and founder and MD Tan Kwang Wah, with M&A Securities Sdn Bhd MD of corporate finance Datuk Bill Tan, and deputy head of corporate finance Danny Wong
Eckem is setting aside 40% of the funds raised from the public issue for construction of a new corporate office, warehouse and laboratory. The company is allocating 13% of the proceeds for expansion of a new production line for rubber products.
The rest will be used to repay bank borrowings, as working capital, and to cover listing expenses.
The Tan family will still hold about 68% in the company post-listing through their private vehicle Trinity Equity Sdn Bhd. Kwang Wah is the managing director of Eckem while his sons Khai Jeik is an executive director in charge of business development and Khai Wen is the chief operating officer.
M&A Securities is the adviser, sponsor, underwriter and placement agent for the IPO.