Wegmans to raise rm29 mln from IPO to increase facilities

KUALA LUMPUR: Furniture manufacturer, Wegmans Holdings Bhd, enroute for listing on Bursa Malaysia’s ACE Market on March 6, is targeting to raise RM29 million in proceeds to expand its manufacturing facilities and for use as working capital.

The initial public offerings (IPO) would comprise 150 million shares at 29 sen each.

There would be a public issue of 100 million shares at 29 sen where 25 million shares will be made available for the Malaysian public, 15 million for eligible directors, employees, and persons contributed to success of the group.

Another 10 million shares will be available for application by way of private placement to institutional and identified investors, and another 50 million shares by way of private placement to identified Bumiputera investors.

The company will also offer for sale 50 million shares where the proceeds will entirely accrue to the selling shareholders.

“From the IPO proceeds, RM22 million will be used for expansion purposes which will include the construction of new factories, management office, showroom and workers hostel, and purchase of machinery and equipment.

“Another RM3.5 million will be used for working capital and the balance of RM3.5 million is for listing expenses,” said executive director Colin Law Kok Lin after the launch of the company’s IPO prospectus here yesterday.

The manufacturing expansion would come in three phases, with the first phase — costing RM11 million — scheduled for completion in the fourth quarter of 2019.

Once completed, production of chairs and tables is expected to double to 950,000 units and 380,000 units respectively, he added.

Wegmans is a manufacturer of wood-based dining room, living room and bedroom furniture that are exported to 42 countries.

Law also said labour cost, shortage of workers and fluctuations in currency exchange were some of the challenges faced by the group.

To address the challenges, Wegman would continue to invest in automation to reduce dependency on manpower, continuously monitor cost of raw materials and fluctuations in the US dollar.

“We will do adjustments accordingly to sustain our profit levels,” he said.

He added that the group would continue to improve quality and designs to keep up with market trends as these were the group’s winning points that had translated into the group recording revenue and profit after tax annual growth of 47.4 per cent and 126.5 per cent, respectively, between 2014 and 2016. — Bernama

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