FARM Fresh Berhad (FFB) is planning to raise up to RM200 mil through a private placement of as many as 109.65 mil new ordinary shares, representing about 5.8% of its existing issued share capital.
The proposed placement is intended to give FFB greater financial flexibility, allowing the group to retain its internally generated cash for working capital and day-to-day operational needs.
It should also help reduce the company’s dependence on debt to finance its expansion initiatives.
Of the RM200 mil in gross proceeds, RM148.3 mil has been set aside for capital expenditure over the next 24 months.
Some RM92 mil of this allocation will go towards expanding FFB’s operations in Cambodia, including upgrades to its dairy processing facilities and the development of an integrated dairy farm in Pursat province.
Another RM56.3 mil will be used to increase FFB’s manufacturing capacity at its Larkin facility in Malaysia, alongside investments in new products and related business ventures.
In addition, RM50 mil from the placement proceeds will be used to finance FFB’s purchase of a further 20% interest in The Inside Scoop Sdn Bhd (TISSB).
The acquisition follows the partial exercise of a put option by Inside Scoop co-founder Edmund Tan Jun Hua.
Upon completion of the transaction, FFB’s ownership in TISSB will rise to 85% from 65%, with Edmund Tan continuing to hold the remaining 15%.
The acquisition is targeted for completion by 25 September 2026, subject to any unforeseen developments.
“We believe the proposed placement comes at an appropriate time, particularly given FFB’s significant capital expenditure needs for 2027, which we estimate at around RM200 mil,” said TA Securities (TA).
Of the funds raised, RM148.3 mil has been allocated specifically towards capital expenditure over the next 24 months.
The exercise should strengthen FFB’s financial flexibility and reduce its reliance on further debt financing, while providing funding to support its regional expansion and efforts to increase production capacity.
From a longer-term perspective, TA see strategic merit in FFB’s expansion into Cambodia.
The move would broaden the group’s regional dairy presence and could eventually improve supply-chain efficiency by bringing milk production and processing closer to the market.
FFB expects its Cambodian operations to help reduce logistics expenses and enhance overall production economics once they are fully operational.
At the same time, investments in additional domestic manufacturing capacity and new product development should help FFB broaden its business beyond its traditional dairy offerings.
The increased stake in TISSB is another positive development, giving FFB greater exposure to the future growth of the Inside Scoop business.
“Overall, we believe the placement is aligned with FFB’s medium- and long-term growth plans,” said TA.
However, the stock could face some near-term volatility depending on the eventual placement price and the discount offered relative to the prevailing market price.—Sept 4, 2026
Main image: Farm Fresh
