PETALING JAYA: Leform Bhd, en route to a listing on the on the ACE Market of Bursa Malaysia on Nov 22, aims to raise RM71.5 million in its initial public offering (IPO) exercise.
Leform and its subsidiaries are principally involved in the manufacturing of and trading in steel pipes, guardrails and flat steel products such as slitted steel coils and sheets and is based in Serendah, Selangor.
Managing director Law Kok Thye believes that this is an opportune time to be listed despite the recent fall of global steel prices.
“We are still upbeat on the outlook of our business moving ahead with the expected rising steel consumption on the back of the recovery in manufacturing and construction industries.
“As such, we are allocating the bulk of our expected proceeds, that is RM30 million out of RM71.5 million, to construct our new headquarters, warehouse storage facility and workers’ accommodation to expand our operations,” he said in conjunction with its prospectus launch today.
The proposed new facility will be a one-stop centre that would allow for higher operational efficiency. In addition, its storage capacity will increase by 93.2%, allowing the group to cater for the anticipated increase in production volume and widen its product range.
“Alongside our expansion plan, another RM21.9 million or 30.6% of the IPO proceeds are earmarked for working capital purposes to purchase raw materials to support our growing business activities. The IPO proceeds are anticipated to accelerate our growth trajectory,” Law added.
Leform’s IPO entails a public issue of 311 million new ordinary shares, representing 21% of the enlarged share capital, along with an offer for the sale of 74.1 million existing shares, representing 5.0% of the enlarged share capital.
Leform plans to maintain a dividend payout ratio of not less than 20% of its annual audited net earnings.
Applications for the public issue are open until Nov 11. MIDF Amanah Investment Bank Bhd is the principal adviser, sponsor, sole underwriter and sole placement agent for the IPO exercise.