LIMAHSOON offer attracts strong demand
on sectors' rosy outlook
New Straits Times,
14 July 2004
EN ROUTE TO LISTING: Lim (third left) stars the balloting
exercise with the help of MIDFCCS general manager Mohd Shuib
Abdul Ghani (right). Looking on are directors of LIMAHSOON.
THE rosy outlook for the furniture and timber-based
sectors has prompted strong demand for shares of LIMAHSOON
Bhd, which is scheduled to list on Bursa Malaysia Bhd's
second board next week.
LIMAHSOON saw its six million shares for public subscription
oversubscribed by 18.41 times.
It attracted 26,151 applications for 116.49 million shares
worth RM125.81 million. The 8.39 million shares made available
for private placement were also fully placed out by Aseambankers
Malaysia Bhd.
LIMAHSOON is involved in the manufacturing of laminated
boards with full in-house saw milling, pressure treatment
and kiln drying facilities.
The group made an initial public offering of 16.4 million
shares of 50 sen each at an issue price of RM1.08 per share.
The issued and paid-up share capital of LIMAHSOON will increase
from RM32 million to RM40.2 million upon listing, comprising
80.4 million shares of 50 sen each.
"We're pleased with the good response," the company's
managing director Lim Chong Khim told reporters after a
balloting ceremony in Kuala Lumpur yesterday.
Upon completion of the public issue, Syarikat Vanlin Sdn
Bhd, which is owned by the Lim brothers, will remain the
controlling shareholder with 50.75 per cent of the enlarged
issued and paid-up share capital of LIMAHSOON.
The group is expected to raise RM24.72 million from its
listing, Lim said.
Of the proceeds, LIMAHSOON plans to use RM3.64 million to
pay for the cost of constructing a new factory, RM12.5 million
to repay bank borrowings and RM6.78 million for working
capital to finance the group's operations and administration
expenses. The remaining RM1.8 million will go to listing
expenses.
The group's facility in Beranang, Selangor, is operating
at 70 per cent capacity and last year, it produced 20,000
cu m of laminated boards.
As at June 16 this year, LIMAHSOON's borrowings stood at
RM19.6 million.
The bulk of the group's raw materials lies in rubberwood,
which is mainly harvested from smallholders.
Over a five-year period, rubberwood prices have increased
from RM90 per cu m in 1999 to RM105 per cu m in 2003.
To secure regular supply of rubberwood, Lim said, a private
joint-venture company recently made an effort to consolidate
and manage rubber smallholdings in Sabah.
"Under the joint-venture agreement, the smallholders
will be guaranteed latex extraction at the prevailing market
price until the tree has grown big enough to be chopped.
"This will increase smallholders' income while sustaining
the supply of rubberwood logs," Lim said.
Lim said LIMAHSOON is planning to make furniture components
like tabletops, chair sets and backs, table and chair legs,
and beds by the end of the year.
The group also has plans to expand its moulding production
to lessen competition from substitutes such as solid timber,
plywood, bamboo, rattan, polymers and medium-density fibreboard
suppliers.
LIMAHSOON was incorporated 17 years ago by Lim's late father,
Ah Soon. It started as a sawmill known as Kilang Papan Lim
Ah Soon Sdn Bhd. The company has now grown to be the market
leader in the RM525 million laminated board industry, commanding
an 8 per cent market share.
Link captured from: www.nst.com.my
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