KUALA LUMPUR: ADF Capital Bhd (ADF), which is involved in the provision of building automation and control solutions, is looking to float its shares on the ACE Market of Bursa Malaysia.
Its initial public offering (IPO) involves 115.5 million shares of 10 sen each, representing about 30.08% of its enlarged issued and paid-up share capital, according to the group’s draft prospectus filed with the Securities Commission Malaysia.
Of that, 19.2 million new shares will be made available to the general public, 12.145 million to eligible directors and employees, and 84.155 million to selected investors by way of placement.
The group intends to use 25.36% of proceeds to be raised from the IPO to acquire new manufacturing facilities, 18.55% to fund research and development activities, 28.72% for the repayment of bank borrowings and 18.09% for working capital, with the remaining 9.28% to defray estimated listing expenses.
ADF has two wholly-owned subsidiaries — ADF Technologies and ACM International. ADF Technologies deals with the design, development, installation, testing, commissioning and maintenance of building automation and control solutions, whereas ACM International designs, develops, manufactures and distributes products for heating, ventilation, and air conditioning systems.
ADF is led by managing director Yong Ah Kim, who is also the group’s founder. Serving as the group’s non-independent non-executive chairman is Tan Sri Datuk Sri Tan King Tai, who is associated with SWS Capital Bhd, where he is currently acting as executive chairman and director.
Ah Kim, along with three other substantial shareholders, who are his children Yong Tsi Hao (deputy managing director), Yong Hui Chien (executive director) and Yong Yi Ying (sales and marketing manager of ACM International), holds an 87.39% indirect stake in ADF via ADF Realty Sdn Bhd. Upon listing, their indirect stake will be diluted to 61.11%. Together with ADF Realty, the four, and Ah Kim’s brother Yong Soon Teik and Hui Chien’s spouse Lok Jun Kai are the promoters of the IPO.
Post listing, the board aims to adopt a minimum dividend payout of 25% of the profit attributable to owners of the company each financial year.
For the financial year ended June 30, 2016 (FY16), ADF’s net profit rose 25.4% to RM7.13 million from RM5.68 million in FY15, whereas revenue came in at RM19.4 million, 8.7% higher than its FY15 revenue of RM17.85 million.
Alliance Investment Bank Bhd is ADF’s principal adviser, sponsor underwriter and placement agent for the IPO.