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Opcom to raise RM20.8m from initial share sale

Posted on: Sunday, 23 November 2003, 06:00 CST

FIBRE optic cable manufacturer Opcom Holdings Bhd is raising

RM20.8 million from an initial share sale, partly to fund its new

production for loose tube cable.

The company plans to invest between RM9 million and RM10 million on new

production lines to make the fibre optic cable.

"At present, we make slotted core cable. We intend to produce the loose

tube cable to meet demands," chairman/managing director Datuk Mukhriz

Mahathir said after an underwriting signing ceremony in Kuala Lumpur

yesterday.

Opcom aims to be listed on the Mesdaq Market by end of next month.

He said the balance of the proceeds will be spent on fibre optic cable

components (RM2.5 million), working capital (about RM8 million), and

listing expenses.

The company expects the new line to be ready by the middle of next

year, which will double up its current capacity of 1,200km of cables a

month.

"With the added capacity, we expect 20 to 25 per cent growth in revenue

for financial year 2005, compared with 2003," said Mukhriz who personally

owns 50.4 per cent of the listed entity.

Opcom recorded a net profit of RM6.8 million for the year ended March

2003, on revenue of RM46 million.

In conjuction with its listing, the company is making a public issue of

26 million shares of 20 sen each, at 80 sen apiece. From the total, 1

million shares will be available for public application, while 17 million

shares will be privately placed out.

AmMerchant Bank is the adviser, sponsor, managing underwriter and

placement agent for the exercise.

Opcom is involved in the manufacturing, importing and marketing of

fibre optic cables and systems. It will also supply these cables and

related accessories.

Mukhriz said it currently commands about 65 to 70 per cent local market

share. He said the local industry is growing at 15 to 20 per cent a

year.

At present, Opcom is mainly catering to the local telecommunications

companies, with Telekom Malaysia Bhd taking up 65 per cent of its supply.

"We have a three-year plus two-year contract with Telekom, and we are

now executing a RM162 million contract from them," he said.

He added that the company is in advance stages of negotiation with

Telekom for future supplies, and it is expecting an outcome by March next

year.

Mukhriz said while Opcom has the track record and is qualified to be

listed on the second board, it has chosen to go on the Mesdaq Market

instead. "Many top technology firms in the US are still listed on the

Nasdaq, I don't see why it would be any different here," he added.

He said as a leading manufacturer in the industry, its presence on the

Mesdaq hopefully will be a boast for Mesdaq's development.

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