Company Background

The Company was incorporated in Malaysia under the Act on 1 March 2023 as a private limited company under the name of Wentel Engineering Holdings Sdn Bhd. On 12 June 2023, the Company was converted into a public limited company and assumed its present name of Wentel Engineering Holdings Berhad.

The Group structure after the IPO is as follows:

The company is an investment holding company. Through its subsidiaries, the company is principally involved in the fabrication of semifinished metal products, fabrication of metal parts and assembly of finished products.

Use of proceeds

1. Part finance the construction of 2 blocks of single storey factory (with double storey office) and 2 blocks of workers’ hostel - 56.31% (within 18 months)
2. Part finance the purchase of new machinery and equipment - 35.24% (within 18 months)
3. Estimated listing expenses (including professional fees, fees to authorities, underwriting, placement and brokerage fees, as well as printing, advertisement and other incidental charges relating to the Listing) - 8.45% (within 3 months)

Part finance the construction of 2 blocks of single storey factory (with double storey office) and 2 blocks of workers’ hostel - 56.31% (within 18 months)

As part of the group’s business expansion plan, the company intends to construct the New Manufacturing Plant at Lot 815 to increase the production capacity of its Group. This will give the company the production capacity to undertake more orders to expand its business operations.

The construction of the New Manufacturing Plant is expected to cost a total of RM67.95 million, the breakdown of which is as follows:

The company intends to utilise RM40.00 million of the Public Issue proceeds to partly fund the aforesaid construction costs, while the remaining costs of RM27.95 million will be met via the Group’s internally generated funds and/or bank borrowings.

Part finance the purchase of new machinery and equipment - 35.24% (within 18 months)

In conjunction with the relocation of Lot 58 operations to the New Manufacturing Plant, the company intends to purchase new manufacturing machinery and equipment for installation at the New Manufacturing Plant. The types of these new machinery and equipment as well as the total estimated cost are set out as follows:

The group intends to utilise RM25.03 million of its Public Issue proceeds to partly fund the aforementioned purchase of new machinery and equipment, while the remaining costs of RM17.36 million will be met via the Group’s internally generated funds and/or bank borrowings.

These new machinery and equipment that the company intends to purchase have better fabrication parameters and/or added functionality compared to its existing machines. The company expects to place orders for the new machinery and equipment by the first half of 2024. The new machinery and equipment will be installed at the New Manufacturing Plant by the first half of 2025.

Business model

The business model is depicted in the following diagram:

The company is involved in the fabrication of semifinished metal products, fabrication of metal parts, and assembly of finished products. The company is supported by its in-house facilities including CNC machines and other manufacturing equipment as well as surface treatment and coating facilities.

Click here to continue the IPO - Wentel Engineering Holdings Berhad (Part 2)

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