Integrated industrial packaging solutions provider has successfully launched its prospectus in conjunction with its upcoming initial public offering (IPO) on the ACE Market of Bursa Securities.
L&P Global and its subsidiaries (the Group) is principally involved in the design and manufacturing of wooden industrial packaging products, including boxes, crates, and pallets. It also provides packing services, circular supply services and trading of related products and raw materials.
The group has 38 years of experience in the industry.
“We are delighted to reach a new milestone with the prospectus launch today, which brings us a step closer towards becoming a listed entity on the ACE Market of Bursa Securities,” Executive Director-cum-Chief Executive Officer of L&P, Miss Ooi Lay Pheng said.
L&P is expected to raise a total of RM33.9 million from the IPO, of which RM10.0 million has been earmarked for capital expenditure mainly for the construction of a new factory in Johor and RM2.0 million for business expansion. RM13.0 million will be utilised for working capital to purchase raw materials to support our operations, RM5.0 million to repay borrowings and the balance RM3.9 million to defray listing expenses.
“Our customer base which comprises of multinational corporations (MNCs) across a diverse range of industries, ranging from renewable energy, electronics and semiconductor, food, automotive, and packaging industries is testament to the Group’s capabilities and scale of operations in meeting the high-quality standards and timely delivery requirements of our customers,” Ms Ooi added.
“During the Covid-19 pandemic, we successfully increased the production of packaging products through our corporate sustainability initiatives to mitigate the supply disruptions of local natural wood. As a result of these initiatives, we had ample alternative materials that require lesser processing which enabled us to increase our production output despite a labour shortage.”
The Group’s revenue grew from RM66.3 million in the financial year ended 31 December 2019 (FYE 2019) to RM120.9 million in FYE 2021, representing a compound annual growth rate (CAGR) of 35.0%.
Meanwhile, profit after tax (PAT) rose from RM4.4 million in FYE 2019 to RM14.3 million in FYE 2021, a CAGR of 80.6%.
In terms of geographical breakdown, 78.5% of revenue was contributed from Malaysia with the remaining 21.5% coming from the Vietnam operations in FYE 2021.
“The IPO is in line with our growth plans to increase capacity to cater for the growing demand of industrial packaging products from our present customers as well as to secure new customers to broaden our customer base. In addition, we aim to expand our geographical presence in Malaysia and to Singapore.”
“Furthermore, to meet the growing need for more sustainable packaging, we target to grow our circular supply services, in which we repair, recycle and repurpose any usable wood materials. Arising from this, wood resources are better managed and waste is minimised.”
“On top of enabling the Company to raise capital for expansion, the upcoming IPO will also enhance L&P’s standing among existing and potential customers, and provide greater visibility in reaching out to a wider talent pool. With the funds raised and listing status, we are confident that the Group will continue to strengthen its market position and tap into the future growth of manufacturing and trade activities within ASEAN and beyond,” Group Chief Executive Officer of Alliance Bank Malaysia Berhad, Mr. Kellee Kam Chee Khiong said.
L&P’s IPO exercise encompasses a public issuance of 113.0 million new shares, representing 20.2% of its enlarged share capital, as well as an offer for sale of 33.8 million existing shares, representing 6.0% of the enlarged shares by way of private placement to selected investors.
Out of the 113.0 million new shares, 24.0 million shares will be made available to the Malaysian public via balloting; 13.0 million shares to its eligible directors, employees, and persons who have contributed to the success of the Group; 6.0 million shares by way of private placement to selected investors; while the remaining 70.0 million shares are reserved by way of private placement to selected Bumiputera investors approved by the Ministry of International Trade and Industry (MITI).
Based on an issue price of RM0.30 per share and an enlarged share capital of 560.0 million shares, L&P will have a market capitalisation of RM168.0 million upon listing.
For its dividend policy, L&P shall endeavour to distribute a dividend of 20% to 50% of the Group’s annual net profit.
Following the prospectus launch, applications for the public issue are now open and will close on 19 December 2022 at 5:00 p.m.
The Group is scheduled to be listed on the ACE Market of Bursa Securities on 3 January 2023.
Alliance Islamic Bank is appointed as the Principal Adviser, Sponsor, Sole Underwriter and Joint Placement Agent for this IPO exercise.
