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Bursa-bound Dancomech plans to raise RM18 million from IPO
by Cals Sat 25 Jun 2016, 20:30
Bursa-bound Dancomech plans to raise RM18 million from IPO
By Gho Chee Yuan / The Edge Financial Daily | June 24, 2016 : 9:48 AM MYTKUALA LUMPUR: Dancomech Holdings Bhd, which recorded a net profit of RM2.74 million in its first quarter ended March 31, 2016 (1QFY16), plans to raise RM18 million when it floats its shares on the Main Market of Bursa Malaysia, most of which will be used to buy offices-cum-stores, and for the repayment of bank borrowings.
According to its initial public offering (IPO) document filed with the exchange, the process control equipment and measurement instruments distributor said its listing entails the public issuance of 24 million new shares of 40 sen each at an offer price of 75 sen apiece.
Of the new IPO shares, 7.5 million are available for public subscription, 2.5 million for eligible directors, employees and persons who have contributed to the success of the group, and 13.99 million for bumiputera investors.
Application for the shares opened yesterday and will close on July 12.
From the proceeds to be raised, Dancomech said 36.1% or RM6.5 million will be used to buy offices-cum-stores within two years, 25.3% or RM4.56 million for the repayment of bank borrowings within a year, and RM3.2 million or 17.78% to defray listing expenses.
The loan repayment will reduce its gearing to 0.04 times from 0.11 times, it said.
In a separate filing, Dancomech said the net profit of RM2.74 million recorded in 1QFY16 came in on the back of RM14.52 million in revenue.
It believes it is well-positioned to enjoy positive growth in the foreseeable future, based on the independent market research report by Protege Associates Sdn Bhd titled “Process control equipment and measurements market in Malaysia and an overview of the Indonesian market”.
The report, said Dancomech, projected that the industrial pipeline systems in Malaysia will grow at a compound annual growth rate of 3.2% from 2016 until 2020, to reach RM2.52 billion in 2020.
[size=16]The company expects to have a yearly dividend payout of up to 30% of its future net profits. [/size]
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