Leong Hup International eyes RM275m from IPO for expansion

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KUALA LUMPUR (April 25): Leong Hup International Bhd, en route for a Main Market relisting on May 16, announced today it is aiming to raise funds of up to RM275 million from its initial public offering (IPO) to support its domestic and regional expansion moving forward.

The integrated poultry producer launched its prospectus today for the IPO exercise, which entails the issuance of up to 937.5 million shares — representing 25.68% of the enlarged issue and paid-up share capital of the company — comprising an offer for sale of up to 687.5 million existing shares and a public issue of 250 million new shares at RM1.10 apiece.

Of the 937.5 million shares, up to 839.5 million shares will be offered to Malaysian and foreign institutional and selected investors including Bumiputera investors approved by the Ministry of International Trade and Industry, while 98 million shares are available for Malaysian public and eligible persons.

Ten cornerstone investors have been identified, including Employees Provident Fund (EPF), AIA Bhd, foreign hedge funds Factorial Master Fund and Ovata Capital Management Ltd, agribusiness firm Louis Dreyfus Company Asia Pte Ltd, in addition to prominent investors Tan Sri Chua Ma Yu as well as Tan Sri Quek Leng Chan via Hong Leong Capital Bhd and GuoLine (Singapore) Pte Ltd.

Proceeds raised from the public issue — amounting to RM275 million — will be earmarked for capital expenditure and working capital to expand and strengthen operations in its existing markets. Total gross proceeds from the offer for sale, of up to RM756.3 million, meanwhile, will accrue entirely to selling shareholders, not to be received by the company.

Speaking to reporters today at the prospectus launch, group chief executive officer Tan Sri Francis Lau Tuang Nguang expressed confidence in the group's prospects moving forward, as it has been consistent in delivering double-digit revenue growths on average over the past five years.

"Going forward, we will remain focused on strengthening our business development strategies to ensure business continuity and growth. To begin with, we will further increase our visibility and presence in Malaysia, Vietnam, and the Philippines.

"We will construct a total of 32 broiler farms into closed-house farms across Malaysia, which is expected to be completed by the fourth quarter of 2020. In addition, there are also plans to expand our feedmill and livestock farms in Vietnam, Indonesia, and the Philippines," the 61-year-old added.

Leong Hup International is the new name of the restructured Leong Hup Holdings Bhd, a Main Board-listed company controlled by the Lau family that was delisted in April 2012 following a privatisation exercise.

It controls two listed companies, namely egg producer Teo Seng Capital Bhd and Indonesian integrated poultry player PT Malindo Feedmil Tbk.