KUALA LUMPUR: High grade calcium carbonate powder producer Zantat Holdings Bhd expects to raise RM14.0 million under its listing on the ACE Market of Bursa Malaysia.
The company plans to use RM3.8 million (27.4 per cent) raised from the initial public offering (IPO) to upgrade its research and development (R&D) centre and purchase additional test and product development equipment.
Zantat managing director Ivan Chan said the upgrading of R&D facilities within Zantat Perak Plant 1 is crucial to facilitate the company's product expansion plan.
"As part of our strategy to expand our product range, we intend to develop three new bioplastic compounds and enhance our ultrafine grade ground calcium carbonate namely 'Zanelite' series and produce more varieties to generate new revenue stream," he said in a statement.
A total of RM1.4 million (9.6 per cent) of the listing proceeds will be used to buy high efficiency machine components.
This includes fully integrated automatic robotic arm palletising system and high-efficiency motors to automate its packing system and move towards industrial automation.
The remainder of the proceeds will be used to upgrade Calrock Perak Plant's infrastructure amounting to RM1.0 million (7.2 per cent), working capital RM1.4 million (10.2 per cent), repay bank borrowings RM3.4 million (24.2 per cent) and to defray the estimated listing expenses of RM3.0 million (21.4 per cent).
Zantat is issuing 56.0 million new shares, or 20 per cent of the enlarged share capital at 25 sen each.
Of the 56.0 million issue shares, 14.0 million issue shares will be made available to the public via balloting.
A total of 11.2 million issue shares for its eligible directors, employees and persons, while the remaining 30.8 million issue shares are for private placement to selected investors.
Its existing shareholders will also make an offer for sale of 16.8 million shares to selected investors by way of private placement.
Zantat is expected to have a market capitalisation of RM70.0 million after listing, which is due on March 27.