KUALA LUMPUR – CPE Technology, a leading engineering precision parts manufacturer, has revealed its plan for an initial public offering (IPO) scheduled for December 7th. The IPO will be priced at RM1.07 per share, with the aim of raising RM179.58 million ($40.2 million). The company seeks a market valuation of RM718.31 million ($160.9 million) as it prepares to list on the Main Market of Bursa Malaysia.
In a prospectus briefing, CEO Lee Chen Yeong shared CPE Technology’s strategic vision to leverage the IPO proceeds for expanding its global market reach and optimizing production efficiency. The company plans to invest significantly in new infrastructure, advanced machinery, and pre-purchasing key raw materials from overseas suppliers to mitigate the impact of fluctuating shipping costs.
The IPO allocation breakdown includes RM69.6 million ($15.6 million) for acquiring industrial land and constructing a new facility in Johor, as part of the company’s strategy to meet the growing demand for its products, particularly in the semiconductor sector. Presently, CPE Technology holds an unbilled order book worth RM69.27 million ($15.5 million) in this sector.
The public offering will consist of 167.83 million new ordinary shares, along with a private placement offer of 67.13 million shares. The allocated funds will be distributed as follows:
– RM32.9 million ($7.4 million) for new machinery and equipment
– RM17.5 million ($3.9 million) for loan repayments
– RM46.9 million ($10.5 million) for working capital
– RM1.4 million ($313,000) for other capital expenditures
– RM11.3 million ($2.5 million) for estimated listing expenses
Following the IPO, Lee Chen Yeong will hold a stake of 32.5% in the company. Foo Ming will retain a 19.5% stake, and Mu Woon Chai will maintain a 13% stake.
CPE Technology’s decision to go public reflects its strategy to solidify its position in the global supply chain by expanding production capabilities and securing resources in the face of volatile shipping costs impacting numerous industries worldwide. The company aims to capitalize on its current market position and expand its global footprint.
1. What is the purpose of CPE Technology’s initial public offering (IPO)?
CPE Technology aims to raise funds through the IPO to enhance its global market reach and optimize production efficiency.
2. How will CPE Technology utilize the IPO proceeds?
The IPO funds will be used for acquiring industrial land, constructing a new facility, investing in machinery and equipment, loan repayments, working capital, and other capital expenditures.
3. What is the intended market valuation for CPE Technology?
CPE Technology seeks a market valuation of RM718.31 million ($160.9 million) as it prepares to list on the Main Market of Bursa Malaysia.
4. Who will hold significant stakes in CPE Technology after the IPO?
Following the IPO, Lee Chen Yeong will hold a stake of 32.5%, Foo Ming will retain a 19.5% stake, and Mu Woon Chai will maintain a 13% stake in the company.
5. Why is CPE Technology going public?
CPE Technology aims to capitalize on its market position and expand its global footprint by expanding production capabilities and securing resources.