ACE Market-bound instant beverage premix manufacturer Orgabio Holdings Bhd has attracted and secured Main Market-listed traditional healthcare group Hai-O Enterprise Bhd as its cornerstone investor.
Orgabio which is scheduled for listing on Bursa Malaysia by December 2021 today inked an underwriting agreement with M&A Securities Sdn Bhd in conjunction with its initial public offering (IPO) exercise.
The exercise involves an issuance of 96.7 million new shares in Orgabio which represent 39% of the company’s enlarged share capital.
Under the agreement, M&A Securities will underwrite a total of 18.6 million new shares made available for the Malaysian public and Orgabio’s eligible directors and employees as well as persons who have contributed to the success of the group.
The remaining 78.1 million new shares will be placed out to selected Bumiputera investors approved by the International Trade and Industry Ministry (MITI) and selected investors by way of private placement.
“Having developed our relationship over a number of years, we see Hai-O Enterprise as a long-term partner that is closely aligned with our ethical and principled approach in doing business,” commented Orgabio’s executive deputy chairman Datuk Ean Yong Tin Sin.
“Their commitment is a strong vote of confidence to our company, business model, strategy and team.”
Proceeds from the IPO will mainly be used to fund and repay bank borrowings secured for the construction of Orgabio’s new factory in Semenyih.
“By constructing a new factory, we will be able to customise the design for our manufacturing area, which in turn will allow us to optimise the configuration of our existing machinery and new machinery to be purchased in order to enhance our manufacturing workflow and efficiency,” justified Ean.
“This will allow our manufacturing workflow to be more linear and continuous as compared to our current manufacturing workflow.”
Part of the proceeds will also be used to purchase new machinery to support and enhance the efficiency of Orgabio’s existing manufacturing activities; working capital requirements (mainly to purchase supplies such as milk powder, creamer, colostrum powder, coffee powder, sugar and sachet foils used for the manufacturing of its products) and to defray its listing expenses. – Sept 30, 2021
