New IPO - World's largest condom manufacturer, Karex Bhd

Company Name: Karex
Closing Date: 23 Oct 2013
Issue Price: RM1.85
Listing Date: 06 Nov 2013

World's largest condom manufacturer, Karex Bhd, en route to a listing on Bursa Malaysia on Nov 6 2013, aims to raise RM75mil from sales of its 40.5 million new shares at RM1.85 each.

From the total proceeds, RM42mil will be used for capital expenditure, RM14mil for working capital, RM10mil to repay bank borrowings, RM5mil for listing expenses and RM4mil for research and development.

The listing will enable it to leverage on the growing opportunities in the global condom industry.

The fund raised for the group's capital expenditure would be used to expand the manufacturing facilities.

The group was ready to develop its largest factory in Pontian, Johor, which was not far from the company's existing plant.

Karex, which currently has 10% of the global market share, expected it to increase to double digits with the increase in demand for condoms worldwide.

The IPO involved the offer of 67.5 million shares comprising the public issue of 40.5 million new shares and an offer for sale of 27 million existing shares. Of these, 47.25 million IPO shares are for institutional and selected investors in Malaysia, Singapore and Hong Kong while 20.25 million shares are for Malaysian retail investors.

The retail offering of 20.25 million shares would comprise of 13.50 million offer shares to the public and the remaining 6.75 million issue shares to eligible directors, employees and business associates.

For its financial year ended Dec 31, 2012, the company posted RM12.01mil in net profit on revenue of RM188.75mil. That compares with the 2011 net profit of RM6.98mil and revenue of RM181.75mil.

Its products are sold via commercial, tender and original brand manufacturers (OBM) markets. In fiscal 2012, commercial, tender and OBM markets constituted approximately 56.9%, 39.3% and 3.8%, respectively, to the group's revenue.

Besides condoms, Karex also produces catheters, latex probe covers and lubricating jelly.