PETALING JAYA: GUAN CHONG BHD, one of the largest cocoa processors in the region, is seeking a secondary listing in Singapore.
Managing director and chief executive officer Brandon Tay Hoe Lian said: “We aim for the dual-listing on SGX-ST to facilitate our access to the capital market in Singapore, giving us the flexibility to tap additional sources of equity funding for our expansion.”
Funds raised from the proposed secondary listing will be used for the group's expansion in its existing operations, product development, and general working capital requirements, as well as to cover the expenses of the second listing.
“Apart from improving our market liquidity, the proposed secondary listing will enable the group to expand and diversify GCB's shareholder base and improve our market visibility, specifically to the retail and institutional investors in the region,” Tay said.
The company said in a statement that the proposed corporate exercise would entail two parts a public offering of up to 62 million shares of 25 sen par, or 19.4% of total existing share capital of 319.7 million ordinary shares, comprising 31 million new shares and 31 million vendor shares to be offered by key substantial shareholders; secondly, a 1-for-2 bonus issue of up to 205.3 million new shares to the enlarged base of shareholders, subsequent to the public offering.
“The bonus issue is an added feature of the corporate exercise, to not only reward the existing shareholders in Malaysia but also to attract new investors in Singapore to participate in our public offering.
“In addition, the enlarged number of shares will certainly help to increase the liquidity and marketability of GCB shares in Malaysia and Singapore,” Tay said,
Once the dual-listing and bonus issue are completed, GCB will see its share capital increase to RM131.5mil, comprising 526.1 million shares of 25 sen each, from the current share capital of RM79.9mil comprising 319.7 million shares.
The proposed dual-listing exercise is expected to be completed by the second half of 2012.
Both the issue and offer price to investors in Singapore will be determined at a later date by the board.
The company is mainly involved in the manufacture of cocoa butter, cocoa powder, cocoa cake and cocoa liquor.
“As we seek to export more cocoa products through Singapore, this exercise will raise our profile even more in the international market.
“With long-term demand for chocolate ingredients likely to stay firm due to rising consumption of chocolate products in emerging markets, being prepared for future expansion is critical.
“Equity fund-raising is a preferred option as it facilitates long-term funding without increasing GCB's gearing,” Tay said.
Guan Chong shares fell 0.36% to RM2.79 versus last Friday's closing of RM2.80.
The company's share price has been on a steady uptrend since the beginning of the year.
What do you think of this article?