PETALING JAYA: Master Tec Group Bhd, a manufacturer of wires and cables, aims to raise RM61.66 million through its initial public offering (IPO) on the ACE Market.
Executive director and CEO Tee Kok Hwa said two-thirds of the proceeds will be allocated for construction of two manufacturing plants in Alor Gajah, Malacca, and purchase of new machinery and equipment for expansion into the manufacture of medium voltage (MV) power cables.
“With the two new plants, we aim to increase our annual production capacity by 3,600 tonnes of MV power cables per year, in addition to the existing cumulative production capacity of up to 9,500 tonnes of copper-cored and aluminium-cored wires and cables per year. We target to commence the newly added production of MV power cables by the fourth quarter of 2024,” he said at the prospectus launch today.
He added, “With the commencement of our new factories and increase in production capacity, we will be positioned to serve a wider range of customers which we are confident will translate into delivery of better financial performance for the company.”
The RM61.66 million IPO proceeds will be allocated as follows: 27.22% for new medium voltage power cable manufacturing plants (RM16.78 million), 39.55% for new machinery and equipment purchases (RM24.39 million), 26.42% for general working capital (RM16.29 million), and 6.81% for estimated listing expenses (RM4.2 million).
Master Tec’s IPO entails the public offering of 285.6 million ordinary shares, comprising a public issue of 158.1 million new shares and an offer for sale of 127.5 million existing shares which collectively represent 28% of the group’s enlarged issued share capital of 1.02 billion ordinary shares.
Based on the enlarged share capital of 1.02 billion ordinary shares and IPO price of RM0.39 per share, Master Tec is expected to have an indicative market capitalisation of RM397.8 million.
SJ Securities Sdn Bhd is Master Tec’s principal adviser, sponsor, sole underwriter and sole placement agent for the group’s IPO and listing exercise.
Master Tec is primarily involved in the manufacturing and distribution of a wide range of low-voltage power cables, control and instrumentation cables and solar direct current power cables under its “Mastertec” trademark since 2009.
The group is also involved in the trading and distribution of a wide range of MV power cables and fibre optic cables to cater to various end-user markets.
In 2022, it held a market share of about 3.57% in Malaysia.
All three of its manufacturing plants are located in Alor Gajah. The group has an accumulated capacity to produce up to 9,500 tonnes of wires and cables annually – 4,000 tonnes of copper-cored wires and cables and 5,500 tonnes of aluminium-cored wires and cables.
Its wires and cables are utilised in sectors including power utilities, renewable energy, property development and construction, oil and gas, infrastructures, public transportn, manufacturing, industrial, electrical and electronics and telecommunications. It is the supplier of power cables to Tenaga Nasional Bhd Sarawak Energy and Sabah Electricity Sdn Bhd .
Based on the IPO prospectus, Master Tec registered slightly lower revenue of RM138.039 million, for the six-month financial period ended June 30, 2023 (FPE 2023) compared with RM169.705 million in the previous year’s corresponding period. However, profit after tax increased by 65% year-on-year, from FPE 2022’s PAT of RM8.240 million to RM13.632 million in FPE 2023.
Master Tec is slated to list on the ACE Market on Jan 29, 2024
