KUALA LUMPUR: Bakery products manufacturer and distributor SDS Group Bhd, which expected to raise RM23.99mil from its proposed listing on the ACE Market, will expand its fleet or lorries and expand its outlets.
SDS Group is issuing 104.29 million new shares at 23 sen per share of which 20.29 million would be offrered to the public via balloting; 23.13 million shares for its eligible directors, employees and business associates while the
remaining 60.87 million shares would be placed out.
Based on the enlarged share capital of 405.82 million shares, it is expected to have a market capitalisation of RM93.34mil.
It will use RM6mil (25%) raised from the initial public offering to expand its wholesale and retail channels in the northern and central regions of Peninsular Malaysia as it expands its capacity at its new Seremban plant.
SDS will use RM7.79mil (32.5%) for general working capital requirements; RM7mil (29.2%) to repay bank borrowings and the remaining RM3.20mil (13.3%) for its listing expenses.
Its managing director Tan Kim Seng said on Friday SDS would expand its fleet of lorries for the northern region and also in Seremban.
As part of the expansion, it plans to set up eight food and beverages outlets in the Klang Valley. As for now, SDS Group has 33 F&B outlets of which five under a licensing agreement in Johor.
Tan expected the expansion in terms of lorries and a new plant would help increase its revenue and earnings.
The IPO is open for subscription from Friday until Sept 23. It is tentatively scheduled to be listed on Oct 7.
M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO.
Among those present were M&A Securities Sdn Bhd head of corporate finance Gary Ting and its managing director of corporate finance Datuk Bill Tan.
SDS was represented by its executive directors Tan Kee Jin, Tan Yon Haw, Tan Kim Chai and directors Datuk Albert Ding, Phang Sze Fui and Azahar Baharudin, and Tan Kim Seng.