KUALA LUMPUR (Nov 24): Steel product manufacturer Leform Bhd, which is en route to be listed on Bursa Malaysia's ACE Market on Nov 30, said the shares it offered to the Malaysian public under its initial public offering (IPO) have been oversubscribed by 1.42 times.
In a statement, the group said a total of 5,285 applications were received from the Malaysian public for 179.51 million shares.
Of these, 2,747 applications were for 59.43 million shares allocated for the Bumiputera, representing an oversubscription rate of 0.61 times. The non-Bumiputera portion, meanwhile, received 2,538 applications for 120.08 million shares, representing an oversubscription rate of 2.24 times.
Meanwhile, the 29.62 million shares reserved for application by eligible directors and employees as well as persons who have contributed to the success of the group have been fully subscribed, it said.
The private placement of 207.34 million shares — involving 22.22 million shares for identified institutional and/or selected investors, along with 185.18 million shares for identified Bumiputera investors approved by the Ministry of International Trade and Industry — have also been fully placed out, said Leform.
Leform aims to raise RM71.5 million via the IPO exercise for expansion expenses, working capital, and repayment of bank borrowings.
Upon listing, the company will have a market capitalisation of RM340.6 million, based on an enlarged share capital of 1.48 billion shares, at an issue price of 23 sen.
“We are encouraged by the positive response received for our IPO. With the incoming proceeds, we are set to embark on our growth plans to expand our operations," said managing director Law Kok Thye.
“Looking at the bigger picture, the roll-out of mega infrastructure projects, along with government initiatives to boost demand for residential properties, bodes well for the steel industry. This is further supported by rising demand for automotive vehicles and locally manufactured furniture.
“With that in mind, we plan to allocate a large portion of our IPO proceeds for the construction of a new headquarters, warehouse storage facilities and workers’ accommodation," he said, adding that the new facilities would boost the company's storage space capacity, thus allowing greater production output and, in turn, higher operational efficiency.
"At the same time, we are also able to introduce a new product range of thicker gauge pipes to cater for diverse needs of our prospective and existing customers,” Law said.
MIDF Amanah Investment Bank Bhd is the principal adviser, sponsor, sole underwriter and sole placement agent for the IPO.