FoundPac to issue 40 million new shares via IPO

by **Cals** Fri 03 Jun 2016, 10:01

FoundPac to issue 40 million new shares via IPO

By Ahmad Naqib Idris / The Edge Financial Daily | June 2, 2016 : 10:31 AM MYT
This article first appeared in The Edge Financial Daily, on June 2, 2016.

KUALA LUMPUR: FoundPac Group Bhd, which is eyeing a listing on the Main Market of Bursa Malaysia, said it intends to use the proceeds from its initial public offering (IPO) to fund its overseas expansion plans.
Based on its draft prospectus, FoundPac, which produces engineering parts for semiconductor manufacturers, will be issuing 40 million new shares via its IPO.
The group said 18.5 million shares will be made available for the Malaysian public and 10.5 million shares will be made available for eligible directors, employees and business associates of FoundPac, while the balance of 11 million shares will be placed out to identified investors.
FoundPac said it will allocate a portion of the proceeds of its listing to set up sales offices in Europe and the United States over the next two years. It said the two countries are the group’s major contributors, accounting for up to 90% of its annual revenue from financial year 2013 (FY13) to FY15.
“Our group intends to continue to focus on Europe and [the] US for future customer[s] and market expansion for the group,” said FoundPac.
The group has also earmarked some of its proceeds to expand its production capacity by purchasing new equipment for production, quality assurance, logistics, engineering departments and other facilities.
The new equipment includes nine computer numerical control machines, two coordinate measuring machines and one grinding machine.
“The increase in production capacity will enable us to expand more aggressively, as we will be able to accept more job orders, ensuring that we will not be constrained by capacity limitations for the foreseeable future, and this will be an impetus to bring our group to the next phase of growth,” said the group, which is led by Lee Chun Wah as chief executive officer, and Datuk Seri Tunku Puteri Intan Safinaz Tuanku Abdul Halim as chairman.
For FY15 ended June 30, 2015, the group posted a net profit of RM12.9 million, up 40% from RM9.21 million a year ago, on the back of a 14% increase in revenue to RM34.37 million from RM30.2 million.