Semiconductor firm Mi Material lodges preliminary prospectus to raise an indicative S$168 million

[SINGAPORE] Singapore-incorporated Mi Material, the materials arm of Bursa-listed Mi Technovation, on Monday (Oct 5) lodged its preliminary prospectus to list on the mainboard of the Singapore Exchange.

It seeks to raise an indicative S$168.2 million from new shares, including those taken up by cornerstone investors.

Mi Material reported a profit of US$14.3 million for the six months ended Jun 30, a 396 per cent increase from the US$2.9 million for the year-ago period.

Revenue more than doubled year on year to US$53.7 million, from US$25.6 million.

The solder-ball manufacturer plans to offer 77.5 million offering shares – comprising 51.5 million new shares and 26 million vendor shares – at an indicative offering price of S$1.80, with the final price to be confirmed upon registration of the prospectus.

Of these, 71.3 million shares will be offered by way of an international placement, and another 6.2 million shares through a public offer in Singapore.

That said, the company noted in its prospectus that there “is no minimum amount which, in the reasonable opinion of our directors, must be raised from the offering”.

Separate from the offering, seven cornerstone investors have entered into agreements to subscribe for an aggregate of 41.9 million shares:

• Abrdn Asia;
• Abrdn Malaysia;
• Amova Asset Management;
• Areca Capital;
• Barings Singapore;
• Fullerton Fund Management; and
• Manulife Investment Management.

Mi Technovation will remain the controlling shareholder with about 73.7 per cent of the shares.

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Including vendor shares, the indicative total offering size is about S$215 million. Mi Material expects to commence trading at 2 pm on Oct 28, with an indicative listing date market capitalisation of S$891 million.

While the company does not have a fixed dividend policy, it said that it intends to distribute dividends of at least 20 per cent of its net profit after tax for the period from its listing date to Dec 31, and for the year ending Dec 31, 2027.

The largest share of the indicative proceeds – about a third or S$55.8 million – will be used to establish a R&D laboratory in the US, targeted at commencing operations in end-2028.

Also, 20 per cent or S$33.3 million will be used to refurbish and upgrade the equipment of its Taiwan production facilities; another 16 per cent or S$27.9 million will be used to expand its production facilities in Malaysia.

Another 14 per cent or S$23 million will be used to establish its R&D lab in Singapore, while the remaining 17 per cent will be used for working capital and fees.

The Singapore R&D lab is expected to begin operations in Q2 2030, and will house 40 R&D and technical personnel to research advanced solder sphere technology.

“In addition, we aim to expand our R&D scope in Singapore by setting up structured collaborations with leading professors by early 2027 to conduct in-depth research in solder metallurgy, copper-based interconnect solutions and novel filler technologies,” the company added in its prospectus.

The equipment manufacturer employs about 20 staff in Singapore in senior management and financial controller roles.

Oh Kuang Eng, executive director and group CEO of Malaysia-based Mi Technovation, told The Business Times in July that the decision to list in Singapore came after considering factors such as access to talent and quality of researchers.

Mi Technovation acquired a 99 per cent stake in Taiwan-based Accurus Scientific in 2021 for RM271 million (US$66.3 million), and placed the company into its Singapore holding company Mi Material this year.