Luxchem IPO Malaysia

The Malaysian Stock Markets will soon see a major listing in this month. The initial public offering is from Luxchem Corporation Bhd, which is planning to come out with its IPO.

What is the size of the Luxchem IPO?
The Luxchem IPO plans to raise around 22 million RM

How many shares will be sold through the Luxchem IPO?
A total of 20 million shares will be sold through the Luxchem IPO in Malaysia

What is the price of the Luxchem IPO shares?
The price of the IPO shares for Luxchem Corp is RM 1.1 per share. This is only indicative price and may change at a later stage.

Where will the IPO proceeds be used by Luxchem IPO?
The capital raised from the Luxchem IPO will be used to fund its expansion plans, its distribution presence in Malaysia and the region in view of the growth potential for the industries that it supplies to.
Of the RM22mil to be raised from the new shares, RM7mil would be used to repay bank borrowings, RM7mil to expand its operations while RM3mil would be for working capital.
Of the remaining RM5mil, RM2.5mil would be used to expand its business and markets and the balance for listing expenses.

What are the business valuations and financial results of the Luxchem Corp Bhd?
The industrial chemical supplier and unsaturated polyester resin (UPR) manufacturer plans to issue its prospectus on June 10 and float before the end of June.
Luxchem supplies over 400 types of industrial chemicals (basic industrial chemicals, plastic in primary forms and synthetic rubber including UPR) to some 740 customers from industries that use rubber and plastics in the production process.
UPR is used in various applications including household products, construction materials, and automotive and industrial equipment
For the financial year ended Dec 31, 2007, the company derived three-quarters of its revenue from the local market with the remainder from the region and the United Arab Emirates.

What are the future prospects of the Luxchem Corp Bhd IPO?
As per the news, the Managing director Tang Ying See told a media briefing recently that the long-term plan was to set up distribution centres in China, Indonesia and Vietnam although this would depend on market conditions.
Currently it has seven distribution and marketing centres, of which six are in Peninsular Malaysia and one in Singapore.

Tang said apart from regional expansion, the company planned to increase capacity at its existing UPR plant in Malacca, which currently has a capacity of 20,000 tonnes per annum.

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