PETALING JAYA: Rubber processor Seng Fong Holdings Bhd has entered into an underwriting agreement with Hong Leong Investment Bank Bhd (HLIB) for its upcoming initial public offering (IPO) on the Main Market of Bursa Malaysia.
According to the company, the listing exercise involves the IPO of up to 160.87 million ordinary shares, or up to 31% 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.
Under the agreement, HLIB will underwrite 42.2 million IPO shares made available for application under the retail offering.
HLIB is also the placement agent for 118.68 million IPO shares allocated to bumiputra investors as well as other institutional and selected investors.
Seng Fong managing director Er Hock Lai said the funds raised from the IPO would go towards the company’s expansion.
“Our plans include the installation of two solar system units to generate electricity in line with the company’s environmental, social and governance (ESG) initiatives to reduce its carbon footprint and have more sustainable business operations which will result in savings of approximately RM2.6mil per annum to our group’s cost of sales.
“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 RM3.5mil per year and further our ESG initiatives by making the business more sustainable over the longer term,” he said in a statement.
He added that the group was planning to increase the total annual capacity of its factories to about 166,000 tonnes by 2023 from the current total capacity of 142,000 tonnes.
Seng Fong produces and trades in Standard Malaysia Rubber (SMR) and premium-grade block rubber.
From financial year 2019 (FY19) to FY21, nearly all of Seng Fong’s revenue was derived from sales to international customers.