KUALA LUMPUR: Spring Art Holdings Bhd (SAH) aims to raise RM24.42 million under its proposed listing on the ACE market of Bursa Malaysia.
Managing director Jack Lim Kok Eng said the company plans to use RM 17.55 million or 71.9 per cent raised from the initial public offering (IPO) to acquire new machinery for Factory C, its new manufacturing factory, which is expected to commence operations in July 2022.
The remaining RM3.67 million or 15 per cent will be spent on general working capital requirements, while RM3.20 million or 13.1 per cent to be used to defray listing expenses.
"We will setup a new manufacturing factory (Factory C) to expand our current manufacturing capacity to 674,000 units per annum.
Factory C, that has a total built up area of 103,926 square feet, will undertake the manufacturing of office, bedroom, living room furniture and other products for export to North America and Europe as well as existing domestic customers," he told reporters after the prospectus launch here today.
SAH desigs and manufactures ready-to-assemble furniture. To date, it owns three facilities in Muar that has an annual production capacity of 337,016 units.
"We intend to attend trade fairs in North America and Europe to increase the awareness of our products as we have a better understanding of the current market trends and developments in these regions," Lim said.
Presently, SAH supplies its ready-to-assemble furniture to distributors, retailers and e-commerce companies from 35 countries such as India, Japan, the United Arab Emirates, Saudi Arabia, Canada and Bahrain.
According to Lim, 100 per cent of the company's sales comes from overseas market, with North America contributing a 2.1 per cent share.
SAH’s listing on the ACE Market of Bursa Malaysia is tentatively scheduled on November 8, 2019.
The company is issuing 97.69 million shares in the company representing 23.5 per cent of the enlarged capital.
Based on the enlarged share capital of 415.69 million shares, the company is expected to have a market capitalisation of RM103.92 million.
The IPO is open for subscription from yesterday to 24 October 2019.