Coraza to raise RM33 million from IPO

Borneo Post Online – 22 December 2021

KUCHING (December 22): Integrated engineering supporting services provider Coraza Integrated Technology Bhd (Coraza) expects to raise RM33 million under its listing on the ACE Market of Bursa Malaysia Securities Berhad (Bursa Securities) for business expansion.

The company plans to use RM15.5 million (47 per cent) raised from the initial public offering (IPO) to purchase new machinery over the next three years for its existing and new factory in Nibong Tebal, Penang.

A further RM6.4 million (19.5 per cent) of the proceeds will be used to part finance the construction of a new factory, as it expands its production capacity and service offerings to take advantage of the rapid growth in the semiconductor industry.

The new factory which is adjacent to its current factory is expected to have a total builtup area of approximately 91,110.1 sq ft. The construction will be carried out in three phases and targeted for completion by December 2023.

Lim Teik Hoe, managing director of Coraza said, over the past two years, the company has received substantial continuous incremental orders for metal fabricated parts from its major customers, in particular precision-machined components used in the semiconductor industry.

“Despite the Movement Control Order restrictions in 2020, our revenue for the financial year ended 31 December 2020 (FY2020) grew 42.8% to RM83.7 million from RM58.6 million a year ago,” he said in a statement.

“The new machinery will further increase our capacity by approximately 25 per cent and improve our service offerings to meet the increasing demand from customers operating in the booming semiconductor industry.”

The remainder of the proceeds will be used for the repayment of bank borrowings amounting to RM4.6 million, RM1.5 million to extend its existing factory to add an additional area for capacity expansion, RM1.2 million to purchase and integrate a new Enterprise Resource Planning (ERP) system to streamline and automate its processes for more efficient operations and RM3.8 million for estimated listing expenses.

Coraza provides a comprehensive range of services, which include fabrication of sheet metal, precision engineering components, as well as provision of related services, such as design and development (D&D) and value-added sub-module assembly to customers across a diverse range of industries including semiconductor, instrumentation, life science and medical devices, aerospace and many others.

“Coraza strives to continuously expand the range of services we provide to our customers that operate in various industries. In order to do so, we continuously invest in machinery in line with improving technology and the requirements of our customers.

As such, we are able to meet our customers’ more advanced requirements as well as keep up with the demands of the market and capture new customers in new markets.

“These additional machinery will enable us to expand our fabrication as well as machining services to produce more complex parts and improve our production capacity, efficiency and quality,” he added.

Under the listing exercise, Coraza is issuing 117.8 million new shares in Coraza, representing 27.5% of the enlarged share capital at an issue price of RM0.28 per share.

Of the 117.8 million new shares, 21.4 million new shares will be made available to the Malaysian public via balloting; 21.4 million new shares for its eligible Directors, employees and persons who have contributed to the success of Coraza Group under Pink Form Allocations while the remaining 74.9 million new shares are earmarked for private placement to selected investors by way of private placement.

As part of its listing exercise, the existing shareholders of the Company will also make an offer for sale of 21.4 million existing shares to selected investors by way of private placement.

Based on the enlarged share capital of 428.3 million shares, Coraza is expected to have a market capitalisation of RM119.9 million.

The IPO is open for subscription from today to January 6, 2022. Coraza is scheduled to be listed on the ACE Market of Bursa Securities by 20 January 2022.

M&A Securities Sdn Bhd (M&A Securities) is the adviser, sponsor, underwriter and placement agent for the IPO exercise.