KUALA LUMPUR: Ecoscience International Bhd (Ecoscience), an integrated palm oil milling services provider en route to a listing on Bursa Malaysia’s ACE Market on July 18, aims to raise RM24.7 million from its initial public offering (IPO).
Its business development director Thing Jin Suan said out of the total proceeds, the company planned to allocate RM5 million (20.3 per cent) to incorporate a wholly-owned subsidiary in Indonesia and establish a new fabrication facility and office in Balikpapan in East Kalimantan province, Indonesia.
“With the increase in upstream activities and Indonesia being the world’s largest palm oil producer, the move will put us in a stronger position to capitalise on the uptrend.
“The expansion is expected to shorten the response time to requests from our Indonesian customers and reduce our shipping costs.
“Furthermore, having a fabrication facility in Indonesia also enhances the group’s prospects in securing new contracts for the expansion or development of palm oil mills and facilities or other related sectors there,” he said during a virtual press conference in conjunction with the launch of the IPO prospectus, today.
Additionally, Thing said RM1 million (4.1 per cent) would be set aside to expand the company’s environmental and energy efficiency business with the purchase and lease of non-chemical water treatment equipment for use in palm oil and other industries.
Ecoscience also plans to utilise RM7.85 million (31.8 per cent) for working capital, RM7 million (28.4 per cent) for repayment of bank borrowings and RM3.8 million (15.4 per cent) for estimated listing expenses.
On outlook, executive director Pan Kum Wan said the industry continued to be positive based on the global consumption of crude palm oil (CPO).
“Our order flow is not affected whether the CPO price increases or decreases and we have not encountered any problems with supply or labour shortage.
“As a company with solid fundamentals, we will be focusing in growing our market share and improve our financial performance,” he said.
Ecoscience’s IPO comprises a public issue of 82.2 million new shares and offer for sale of 30 million existing shares.
At an issue price of 30 sen per share and an enlarged share capital of 340 million shares, the company will have a market capitalisation of RM102 million upon listing.
Applications for the public issue are open today and will close on July 1, 2022 at 5pm. – BERNAMA