Highlight Frontken unit suspends Taiwan IPO plan

by **Cals** Thu 13 Aug 2015, 12:06

Highlight
Frontken unit suspends Taiwan IPO plan

KUALA LUMPUR (Aug 13): Frontken Corporation Bhd ([You must be registered and logged in to see this image.] Financial Dashboard) has applied to the Taiwan stock exchange to withdraw its subsidiary Ares Green Technology Corporation (AGTC) from the market as an emerging stock.
In a filing with Bursa Malaysia yesterday, Frontken, which holds a 60.01% stake in AGTC, said it is of the opinion that there are no short-term needs to raise funds for AGTC via an initial public offering (IPO) in light of the uncertainties in the global economy posing as increasing risk to future economy growth.
“Amidst global uncertain economic and financial conditions, in line with the AGTC Group’s future development planning and effort in improving operational efficiency via cost saving measures, the Board of AGTC has decided to adjust its original IPO plan after due considerations and a resolution was approved by the Board of AGTC on Aug 12, 2015,” the filing stated.
“The resolution was for AGTC to apply to the Taiwan Stock Exchange for its withdrawal from the Over-The-Counter GreTai Counter and subsequently will apply to the Financial Supervisory Commission for public trading revocation,” it added.
The company said the plans are not completely shelved, just merely put on hold until future condition warrants the needs of such an exercise.
AGTC is principally involved in the provision of surface treatment and advanced precision cleaning of components related to LCD screens and semiconductor industries.
Frontken said since AGTC was first listed on the Over-The-Counter GreTai Counter on Dec 30, 2004, the company had suffered from the economic recession but managed to turn around from charting losses to profits.
Frontken said the company saw its earnings per share (EPS) increase from NTD1.71 (21 sen) to NTD2.91 (36 sen) over the previous two financial years, while revenue increased from NTD640.37 million (RM79.47 million) to NTD857.23 million (RM106.38 million).
The move to suspend AGTC’s IPO plan will enable AGTC to focus on its existing resources and put AGTC in better stead to meet the financial challenges ahead, Frontken said.
“Therefore, AGTC will focus on its business to enhance its market position and to continue to adopt available cost saving measurements in order to maintain its profitability,” the filing read.
“Should there be any future need for large scale capital expenditure and the Board of AGTC is of the view that raising funds from the capital market is the best available option, the IPO option will then be re-called and be re-considered,” it added.
Frontken (fundamental: 2.2; valuation: 1.7) shares are currently trading at 1 sen or 4.88% higher to 21.5 sen, with 23.13 million shares done.
Frontken’s market capitalisation is RM214.94 million.
[size=12](Note: The Edge Research's fundamental score reflects a company’s profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)[/size]