Cosmos aims to raise RM22.44m from IPO

KUALA LUMPUR: Cosmos Technology International Bhd, enroute to a listing on the ACE Market of Bursa Malaysia Securities Bhd (Bursa Securities), aims to raise gross proceeds of RM22.44 million in its initial public offering (IPO).

Cosmos via its subsidiaries is an integrated water technology solutions provider principally involved in the distribution and instrumentation services of fluid control products and manufacturing of fabricated metal products for industrial applications used in the water, wastewater and oil and gas industries.

Cosmos debuted on the LEAP Market on March 9, 2020 and was subsequently voluntarily delisted on Nov 10, 2021 to facilitate its listing on the ACE Market. Cosmos will be the first company to be listed on the ACE Market progressing from the LEAP Market of Bursa Securities upon completion of this listing exercise.

Cosmos is anchored by two subsidiaries namely Cosmos Instruments Sdn Bhd, which is the certified partner and solution partner as well as the official partner for two major brands of fluid control and telemetry products, and Marc Conleth Industries Sdn Bhd, which has established a track record in the manufacturing of metal frames for shaker filters for the oil and gas industry.

Of the gross proceeds of RM22.44 million, Cosmos has earmarked RM10 million for the acquisition of a new building (a semi-detached factory comprising factory, office and warehouse areas) located in Balakong, Selangor, RM3.5 million for the purchase of new machineries, RM1.5 million for the repayment of bank borrowings, RM4.44 million as working capital, while the remaining RM3 million to defray listing expenses.

The company’s IPO entails a public issue of 64.13 million new shares at the IPO price of 35 sen per share. Of this, 12.83 million shares will be made available for application by the Malaysian public through balloting, 7.88 million shares will be allocated to eligible directors, employees and persons who have contributed to the success of the group, 11.36 million shares will be set aside for private placement to selected investors and 32.06 million shares will be offered via private placement to bumiputra investors.

Cosmos managing director Datuk Chong Toh Wee said its capability in customising fabricated metal products and connecting technology, and software-based solution has helped the company establish a good track record over the years. The favourable prospect of oil and gas, water and wastewater industries due to the increased demand will primarily drive the growth of the fluid control, telemetry product and fabricated metal products market. The market will be propelled by factors like the turnaround in these key industries.

“With this IPO, we will be able to streamline and consolidate our operations, and purchase new machineries to enable us to increase our manufacturing capacity and capability that can take us to even greater heights,” Chong said in a statement in conjunction with the launch of its prospectus.

Cosmos chairperson Datuk Phang Ah Tong expects more water projects such as the upgrading and building of water treatment plants and the replacement of ageing water pipes to be rolled out by the government as part of its intention to lower the national non-revenue water level to 25% by 2025.

“As for metal frames for shaker filters, the division is benefiting from the growing opportunities within the oil and gas industry value chain generated by the substantial capital expenditures required to monetise new oil and gas discoveries.

“The future prospects of Cosmos are optimistic, underpinned by the promising opportunities in the sectors in which it operates, and supported by the company’s competitive strengths and advantages,” added Phang.

Mercury Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.

Upon listing on the ACE Market of Bursa Securities, Cosmos will have an estimated market capitalisation of RM89.78 million based on the issue price of 35 sen per share and the company’s enlarged share capital of 256.50 million shares.

Pursuant to the launch of Cosmos’ prospectus, applications for the public issue are open from today and will close on Sept 22 at 5pm. The group is scheduled to be listed on the ACE Market of Bursa Securities on Oct 6.