KUALA LUMPUR: TMK Chemical Bhd, a player in Malaysia’s inorganic chemicals market, aims to raise RM385 million from its initial public offering (IPO) in conjunction with its listing on the Main Market of Bursa Malaysia Securities.
The RM385 million will be raised through the public issue of 220 million new shares at RM1.75 per share.
TMK’s non-independent executive director and managing director, Wong Kin Wah, said that over the past 35 years, the company has expanded its service offerings to include chemical terminal services and this year they took a major step forward by vertically integrating into the manufacturing of inorganic chemicals.
“As our business has grown, so has our regional footprint, which now spans Malaysia, Singapore and Vietnam. Our decision to pursue this IPO is driven by a clear vision of the future. We see significant opportunities within the sector and are committed to capitalise on them,” he said at the launch of TM Chemical’s prospectus in conjunction with the IPO today.
Speaking about the company’s planned new facility in Singapore, Wong said TMK Chemical currently operates two fully utilised warehouses. “Although our business in Singapore is already substantial, it is a natural progression for us to expand further there.”
He said the company’s brand is well established in Singapore and the business performance has been strong. “The expansion aligns with our focus on organic growth as we’ve achieved consistent growth in Singapore year after year.”
TMK Chemical has allocated 23.4% of the proceeds for the construction of a plant in Banting, Selangor, while 12.9% will go towards the construction of a facility in Singapore.
Some 25.7% of the proceeds have been budgeted for the pursuit of acquisitions to be identified, and 20.6% will be allocated for working capital. Additionally, 13% of the amount raised is earmarked for the repayment of borrowings, and the remaining proceeds will cover IPO and listing-related expenses.
Based on the enlarged issued share capital of 1 billion shares and share price of RM1.75 apiece, the market capitalisation of TMK Chemical amounts to RM1.75 billion.
The company plans to set aside 30% to 50% of its profit after tax as annual dividend for shareholders.
The public issue portion of the IPO opened for subscription from yesterday and applications will close at 5pm on Nov 29. TMK Chemical is set to be listed on Dec 12.
Maybank Investment Bank Bhd is the principal adviser, sole book-runner and sole underwriter for TML Chemical’s IPO.
