FoundPac eyes RM21m from IPO

PETALING JAYA: Engineering parts maker FoundPac Group Bhd, which launched its prospectus yesterday, aims to raise RM21.6 million from its initial public offering (IPO) involving 40 million new ordinary shares of 10 sen each at an issue price of 54 sen per share.
A sum of RM8 million will be used for the purchase of property, plants and equipment, while the balance, RM3.6 million will be used as working capital, RM3 million for design and development efforts and RM4 million will be to fund the group’s overseas expansion plans.
FoundPac and its subsidiaries fabricate and supply precision engineering parts, namely stiffeners, test sockets, hand lids and related accessories that are sold to semiconductor manufacturers and outsourced semiconductor assembly and test companies or for printed circuit board design houses or fabless semiconductor companies which are used to facilitate the testing of integrated circuits.
Although it is locally based, its products are exported to various international markets primarily in Europe and the US, with the latter constituting almost 73% of its sales in FY2016.
“In light of the positive prospects for the growth of the semiconductor industry globally, thanks in part to the continued increase in adoption of mobile devices and the Internet of Things, I believe the time is right to take advantage of FoundPac’s established track record, to steadily expand our market share in major markets including Milan, Italy and California, US, where we have plans to set up new sales offices,” FoundPac CEO Lee Chun Wah said in a statement.
He said it plans to strengthen its capabilities via the setting up of a dedicated design and development team focused on product development. The group also aims to diversify its customer base to include end-user industries like those in the automotive industry.
“The proceeds from a successful listing will help drive the next phase of the group’s growth, and strengthen our business as a whole. I am both excited and delighted therefore, to welcome potential investors to be a part of this new chapter in our corporate history as we pursue an active expansion blueprint,” Lee said.
The 40 million public issue shares comprise 18.5 million shares which will be offered to the public by way of balloting and which 50% will be set aside for bumiputra investors; 10.5 million shares for subscription by eligible directors, employees and business associates/persons who have contributed to the group and 11 million shares to be placed out to identified investors.
In addition, FoundPac’s major shareholder FoundPac Holdings Sdn Bhd will undertake an offer for sale of 92 million shares by way of placement of 55 million shares to identified investors as well as 37 million shares to bumiputra investors approved by the International Trade and Industry Ministry.
FoundPac is expected to have a market capitalisation of about RM199.8 million upon listing on the Main Market of Bursa Malaysia, based on the IPO price of 54 sen. The closing date of the IPO is Dec 19, 2016 and the tentative listing date is Dec 29, 2016.
TA Securities Holdings Bhd is the principal adviser, sole underwriter and placement agent for the IPO exercise.