KUALA LUMPUR (Aug 12): Autopart distributor MSB Global Group Bhd has filed for an initial public offering (IPO) on the ACE Market of Bursa Malaysia to raise funds to rebuild a factory that doubles up as a warehouse.

The proposed IPO involves a public issue of 133 million new shares and an offer-for-sale of 74 million existing shares at a price to be determined later, MSB Global said in the draft prospectus. All in all, the listing offers investors up to 34% stake in the company.

The new factory cum warehouse, located in Ulu Tiram in Johor, is expected to have an estimated built-up area of about 79,905 square-feet at a land owned by MSB Global managing director Datuk Ow Kee Foo, the company said.

“We intend to reconstruct and refurbish the building to house our own factory, producing automotive lubricants and fluids using blenders and automated fill-and-finish production lines, together with a warehouse to store our in-house branded automotive lubricants,” the company said.

MSB Global largely resells aftermarket automotive parts and components, such as driveshaft and fuel pump, which generates a little over two-thirds of its annual revenue. The rest comes from marketing and distribution of automotive lubricants and fluids, including engine oil.

In the financial year ended Dec 31, 2023, the company made a net profit of RM8.26 million on revenue of RM63.87 million, from sales to over 200 customers.

Under the public issue, the company is allocating 30.5 million new shares to the Malaysian public and 6.1 million shares to eligible persons. The company is also setting aside 76.25 million shares to approved Bumiputera investors and the remaining 20.15 million shares to select investors, both through private placement.

Proceeds from the sale of new shares will also go towards the purchase of new machinery and equipment, and other expenses for the commissioning of its new blending, as well as fill-and-finish production lines for its automotive lubricants and fluids business.

The maximum capacity of finished products that can be produced from the new blending, as well as fill-and-finish production lines is 8.55 million litres per year, MSB Global said.

Further, it is also budgeting some of the proceeds to buy and market its in-house branded electric vehicle (EV) chargers. “We target to launch our in-house branded EV charger” by the second quarter of 2025, MSB Global said.

The rest of the proceeds will be used to pare down the company’s borrowings and to defray listing expenses.

Gross proceeds from the offer for sale of existing shares, meanwhile, will accrue entirely to the selling shareholders Ow, executive director Lai Swee Ping, and Lee Li Lian, the wife of a director in one of its subsidiaries.

M & A Securities is the IPO’s principal adviser, sponsor, underwriter and placement agent.