KUALA LUMPUR (May 6): Xin Hwa Holdings Bhd (XHH) is a step closer to be listed on Bursa Malaysia. The Johor-based logistic company signed an underwriting agreement with Public Investment Bank for its Initial Public Offering (IPO) exercise.

In a statement, Xin Hwa said that the IPO exercise entails a public issue and offer for sale of 37.78 million new ordinary shares and 16.22 million existing ordinary shares respectively, totalling 54 million shares.

There will be nine million shares available for application by the Malaysian public, three million shares available for application by the eligible directors, employees and other persons who have contributed to the success of Xin Hwa.

Meanwhile, 18.22 million shares will be available for application by Bumiputera Investors approved by the Ministry of International Trade and Industry (MITI). The remaining 23.78 million shares will be allocated private placement to selected investors, according to the statement.

Public Investment Bank is the principal adviser, sole Underwriter and sole Placement Agent for Xin Hwa’s IPO exercise.

After the signing ceremony, Xin Hwa’s managing director Ng Aik Chuan said the company was glad to have reached the next phase of its corporate life cycle.

“I believe this listing exercise would enable XHH to strengthen its position in the logistics industry as it charts its future growth story.

By being a listed entity, we hope to further increase confidence among our investors, stakeholders and customers while we continue to work towards enhancing the long-term value of our company by reinvigorating customers’ attachment to our brand and providing quality services across all our business segments,” Ng said.

Ng said the proceeds to be raised from the IPO exercise would be predominantly utilised for Xin Hwa’s business expansion over the next two years which includes the construction of a new warehouse in Pasir Gudang, as well as the expansion of XHH’s fleet of vehicles.

“We are delighted to have the support of Public Investment Bank as our sole underwriter for our IPO, which signals a strong sense of confidence towards XHH,” he added.

Public Investment Bank’s chief executive officer Eddie Fong Loong Seng said the IPO would further strengthen Xin Hwa’s financial position as it embarks on the next phase of their business expansion plans.

Barring any unforeseen circumstances, the company is expected to launch its prospectus next month.

Xin Hwa is an integrated logistics service provider involved in land transport operations, warehousing and distribution operations and other services. The company’s land transport operations incorporate cargo transportation services and container haulage services whereas other services incorporate freight forwarding and customs brokerage services as well as manufacturing and fabrication of trailers, the statement said.

It has over 800 employees and manages a fleet of over 1,100 vehicles covering prime movers, trucks and trailers.