KUALA LUMPUR, May 26 (Bernama) -- Seng Fong Holdings Bhd has signed an underwriting agreement with Hong Leong Investment Bank Bhd (HLIB) for its initial public offering (IPO) on the Main Market of Bursa Malaysia.
According to its draft prospectus, the listing exercise involves 160.87 million ordinary shares, or 31.0 per cent of the company’s enlarged number of issued shares comprising a public issue of 90.81 million shares and an offer for sale of up to 70.06 million shares.
Seng Fong is a rubber processor producing and trading Standard Malaysia Rubber (SMR) and premium grade block rubber.
HLIB will underwrite 42.20 million shares available for application under the retail offering. It is also the placement agent for 118.68 million shares allocated to Bumiputera investors approved by the Ministry of International Trade and Industry as well as other institutional and selected investors, a statement from Seng Fong said.
Its managing director Er Hock Lai said funds raised from the listing exercise will be used for the company's expansion plans, which include installing two solar system units to generate electricity to build sustainable operations that will result in savings of about RM2.6 million a year.
“We will also be installing a biomass system to reduce diesel consumption used to generate fuel for our dryer system; this initiative will also help achieve savings of RM3.5 million per year, Er said.
There are also plans to raise the total annual capacity of their factories.
Meanwhile, HLIB group managing director/chief executive officer Lee Jim Leng said Seng Fong has a solid reputation and a history dating back to 1986.
"Rubber is a key material in many industries and in particular, the automobile industry where there is steady demand. We have no doubt that Seng Fong will continue to excel and to build on the foundations set down almost four decades ago," she said.
The listing is an effective platform for the company to move into the next stage of growth, she added.
Almost all of Seng Fong’s revenue was derived from sales to international customers for its 2019-2021 financial years.
-- BERNAMA
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