K C Metal Sheet Company (KCM), a Thailand based metal sheet manufacturer, is planning to raise 531.8 million baht ($16.36 million) through an initial public offering (IPO) in the Market for Alternative Investment (MAI), this year.
The finance raised through the IPO will be invested in growing the company’ s business over the next three years.
Of that investment, 60 million baht will be used to set up three big branches with the installation of new machines in Phrae, Lampang and Phuket; 294.4 million baht will go to add 92 small offices nationwide to support its sales; 167.4 million baht will be spent on expanding the warehouses for rent in Khon Kaen, Udon and Nakhon Ratchasima; and the rest 10 million baht will be used for boosting the production capacity of steel.
“The investment will start in 2015 and complete in 2017. We hope to see our revenue jump from 840 million baht ($25.84 million) this year to two billion baht ($61.5 million) in the next three years,” said the company’s managing director Nipon Charoenkit.
However, the factors that he is concerned are the declining of gross domestic products (GDP) and lower revenue of farmers, who are the company’s core customers.
According to National Economic and Society Development Board, Thailand’s GDP in the first half of this year shrank by 1%, but it forecasts that the economy will grow 1.5%-2% in 2015.
In the first nine months this year, KCM recorded total revenue of 555.6 million baht ($17 million), down from 642.1 million baht ($19.7 million) in the same period last year. However, the net profit declined significantly from 44.01 million baht ($1.35 million) to 11.72 million baht ($360,615) due to the political turmoil and the failure of the previous government’s rice scheme, which threw the farmers into more debt.
Currently, held 100% by the Charoenkit, KCM has 480 million shares with the paid-up capital of 120 million baht ($3.69 million).
After the IPO, it will mark 680 million shares and the paid-up capital will increase to 170 million baht ($5.23 million). At the same time, the Charoenkit will be diluted to 70.59% of shares and the rest 29.41% will go to the public.