RUBBER processor and trader Seng Fong Holdings Bhd has obtained approval from the Securities Commission (SC) to list on the Main Market of Bursa Malaysia.
With history tracing back to 1986, Seng Fong is principally involved in the processing of Standard Malaysia Rubber (SMR) and premium grade block rubber as well as trading of block rubber whereby its customers are mainly tyre manufacturers or international rubber traders.
The company also operates a Malaysian Rubber Board-approved laboratory for the testing, grading and certification of the processed block rubbers.
According to Seng Fong’s initial public offering (IPO) prospectus posted on the SC’s website, the listing exercise entails an offering of up to 160.87 million ordinary shares comprising a public issue of 90.81 million shares and an offer for sale of up to 70.06 million shares.
The company’s institutional offering constitute 118.68 million shares or 2.9% of its enlarged issued shares while the retail offering amounted to 42.20 million shares or 8.1% of its enlarged issued shares.
The institutional offering comprises:
- 87 million IPO shares or 12.5% of its enlarged issued shares to Bumiputera investors approved by the Ministry of International Trade and Industry (MITI); and
- 81 million IPO shares or 10.4% of its enlarged shares to other institutional and selected investors.
Meanwhile, the retail offering comprises:
- Malaysian public:97 million IPO shares or 2.5% of its enlarged issued shares to Bumiputera investors and 12.97 million IPO shares or 2.5% of its enlarged issued shares to non-Bumiputera investors; and
- 25 million IPO shares or 3.1% of its enlarged issued shares to eligible directors and employees of the company as well as persons who have contributed to the success of the company and its subsidiaries.
“The listing will enhance our reputation and assist us in expanding our customer base globally while allowing us to gain access to the capital markets to raise funds for future growth opportunities,” commented Seng Fong’s managing director Er Hock Lai.
“It will also enable us to raise the funds we need for the installation of a biomass system that will provide a source of fuel for our processing operations while at the same time achieve cost savings by reducing overall fuel costs.”
Additionally, Seng Fong is in the midst of installing two solar system units to help it lower electricity cost as well as to help the company achieve its sustainability goals of reducing greenhouse gas emissions.
A portion of the proceeds from the listing will also go to working capital needs which will include increasing production capacity and repaying bank borrowings which includes a term-loan for the Solar Systems installation.
Almost all of Seng Fong’s revenue is derived from sales to international customers for its financial years ended Dec 31, 2019 to 2021.
Hong Leong Investment Bank Bhd is the principal adviser, underwriter and placement agent for Seng Fong’s listing exercise. – April 26, 2022
