KUALA LUMPUR: Zantat Holdings Bhd is looking to raise RM14mil from its listing on the ACE Market, while also aiming to improve the branding of the company for personnel recruiting purposes from the exercise.
The high grade calcium carbonate (CC) powder producer is tentatively scheduled to be listed on Mar 27, with managing director Ivan Chan commenting that funds raising aside, he believes the listing will help attract talented individuals for employment with the company.
At the same time, he said Zantat is planning to use RM3.8mil raised from its initial public offering to upgrade its research and development (R&D) centre and to purchase additional test and product development equipment.
“With the upgraded R&D facility and enhanced testing capabilities, we will be focusing on our in-house product development and enhancement, including the testing of our products as well as for new and existing customers pertaining to our CC products and bioplastic compounds,” he said.At the company’s prospectus launch here yesterday, Chan noted that the R&D investment is part of Zantat’s strategy to expand its product portfolio, as it intends to develop three new bioplastic compounds and improve its ultrafine grade ground CC series.
Another RM1.4mil, or 9.6% of the proceeds, will be used to purchase high-efficiency machine components such as fully integrated automatic robotic arm palletising systems and high-efficiency motors to automate its packing system and move towards industrial automation.
The remainder of the proceeds will be utilised for a number of purposes, including to upgrade the infrastructure of subsidiary Calrock Sdn Bhd’s Perak plant, to repay bank borrowings, as well as to cover the estimated listing expenses of RM3mil.
The listing exercise will see Zantat issuing 56 million new shares, representing 20% of the expanded share capital of 280 million shares, at an issue price of 25 sen per share.
Anticipated to have a market capitalisation of RM70mil after the listing, the company will make available 14 million shares to the Malaysian public through balloting, while 30.8 million shares are reserved for private placement to selected investors.
The group posted a net profit of RM5.7mil for the nine months ended Sept 30, 2023 (9M23), which had surpassed the RM5.4mil registered for the whole of 2022 by 5.6%, as profit margin also improved to 6.2% from the 4.8% charted for 2022.
Zantat attributed the stronger performance in 9M23 to lower selling and distribution expenses, on top of reduced logistic costs from declining sea freight rates.
Executive director Chan Jee Chet said moving forward, geopolitical tensions should not affect freight rates for the group, whose main overseas market is India, which contributes to 60% of the company’s total revenue.Public subscription shares are open for application starting from yesterday until March 13.