HPMT SEEKS BURSA LISTING

70.3pc of IPO proceeds will be used to purchase new machinery, equipment

HPMT Holdings Bhd, a manufacturer and distributor of cutting tools, is seeking a listing on Bursa Malaysia’s Main Market by offering 116.62 million shares under its initial public offering (IPO).

The IPO included 75.55 million new shares, or 23 per cent of its enlarged issued capital of 328.49 million, according to HPMT’s draft prospectus posted on the Securities Commission’s website.

The issue price had yet to be fixed, said the company.

Of the 116.62 million shares, 16.43 million, or five per cent, of the enlarged issued capital will be made available for the public, 8.3 million (2.5 per cent) for eligible directors and employees and 50.83 million, (15.5 per cent) for institutional and selected investors by way of private placement.

The shareholders are offering 41.06 million shares, or 12.5 per cent, of its enlarged share capital, to government-approved Bumiputera investors as well as institutional and selected investors.

HPMT, which has an issued share capital of 252.94 million shares worth RM63.23 million, is also involved in supporting equipment and accessories for metalworking as well as providing physical vapour deposition coating services.

The company said 70.3 per cent of the total proceeds would be used to buy new machinery and equipment, 18.5 per cent for working capital and the remaining 11.2 per cent for listing expenses.

“With the expected increase in demand for our products, we intend to expand our production capacity via the purchase of new machineries and equipment,” said HPMT.

The company expects its production capacity to increase to 212,600 units a month by end of 2021, from 130,900 units as at December 31 last year.

HPMT said it had established a strong sales network, with a focus in Europe and Asia.

It has four subsidiaries in Malaysia, Germany, Hong Kong and China to facilitate distribution of cutting tools and trading of third party cutting tools, supporting equipment and accessories for metalworking.

HPMT posted an 18.09 per cent higher net profit of RM14.84 million in the year ended December 31 last year.

Group revenue rose 13.29 per cent to RM85.15 million from RM75.16 million in 2016.

With the expected increase in demand for our products, we intend to expand our production capacity via the purchase of new machineries and equipment. HPMT HOLDINGS BHD