Engineering precision parts manufacturer CPE Technology Bhd (CPE) has priced its shares at RM1.07 each for its initial public offering (IPO) which seeks to raise about RM179.58 million.
In its prospectus filing on Monday (Nov 20), the valuation will give CPE a market capitalisation of RM718.31 million upon listing on Bursa Malaysia’s Main Market on December 7, 2023, based on an enlarged issued share capital of 671.31 million.
The IPO involves the issuance of 167.83 million new ordinary shares in the company or 25% of the enlarged share capital.
CPE is involved in the manufacturing of precision-machined parts and components and provision of computer numerical control machining services. Its main customer industries include semiconductor, life science and medical devices, and sports equipment, with key clients in the US, Singapore and Malaysia, the prospectus read.
In the financial year ended June 30, 2023 (FY2023), CPE’s net profit slipped 10.67% to RM30.29 million from a record RM33.91 million in FY2022, while revenue rose 4.63% to RM145.28 million from RM138.85 million.
Of the new shares to be issued in the IPO, 33.6 million shares are meant for subscription by the Malaysian public, 83.9 million shares for Bumiputera public investors, and 50.3 million for institutional and selected investors by way of private placement.
The IPO will also see the offer for sale of 67.13 million shares or a 10% stake to institutional and selected investors by way of private placement.
The proceeds are expected to be used in the proportions of RM69.6 million (38.76%) earmarked for the acquisition of new industrial lands and construction of new plants, RM32.9 million (18.31%) for machinery and equipment expenses, RM17.5 million (9.72%) for bank borrowing repayment, RM46.9 million (26.12%) to partly finance working capital expenditure, RM1.4 million (0.79%) to partly finance other capital expenditures and the remaining of RM11.3 million (6.3%) for estimated listing expenses.
