HONG KONG: Top Glove Corporation's plan to list in Hong Kong and raise up to $1 billion has been delayed as the world's largest rubber glove maker seeks to resolve a U.S. import ban on its products, sources with direct knowledge of the matter said.
The delay is another setback to the Malaysian company from a ban on imports on its products imposed in July by the U.S. Customs and Border Protection (CBP) citing forced labour practices. That ban has taken the shine off Top Glove, which otherwise posted a record profit in its latest quarter due to booming demand driven by the COVID-19 pandemic.
Top Glove, which is already listed in Kuala Lumpur and Singapore, flagged in April it would sell 793.5 million shares in the listing, half what it proposed in its application to the Hong Kong bourse in February.
Before that, in March Reuters reported that Citigroup Inc and UBS Group opted out of working on the deal due to labour practice concerns.
However, the deal has now stalled as the company awaits word from CBP on whether the ban would be lifted any time soon, the sources told Reuters.
Potential investors questioned Top Glove and its advisers on the sanctions during preliminary briefings ahead of the listing, they said.
Top Glove had hoped to complete the listing by the end of the second quarter in 2021, said the sources, who could not be named as the information was not yet made public.
Top Glove told Reuters in an emailed statement it could not comment on the listing process due to regulatory reasons.
"However, Top Glove remains committed to the proposed IPO in Hong Kong and where appropriate, material developments regarding this will be announced on the relevant stock exchanges," it said.
Top Glove shares were down 2.3% in Kuala Lumpur on Tuesday afternoon. They have lost about 17.3% so far in 2021 after their near four-fold gain last year. - Reuters
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