KUALA LUMPUR: Johor-based vegetable wholesaler Farm Price Holdings Bhd aims to raise RM24.48 million from its listing on the ACE market of Bursa Malaysia, to expand its operations.
The company's initial public offering (IPO) is priced at 24 sen per share, comprising the issuance of 102 million new ordinary shares in Farm Price, constituting 22.67 per cent of its enlarged share capital.
Additionally, a private placement will be conducted for the offer-for-sale of 33 million existing shares, equivalent to 7.33 per cent of the enlarged shares.
Upon listing, Farm Price will have a market capitalisation of RM108 million based on an enlarged issued share capital of 450 million shares.
Farm Price will set aside RM24.48 million proceeds raised for the construction of new facilities (RM6.4 million), purchase of machinery, equipment and logistics fleet (RM2 million), planned regional distribution and procurement centre (RM1.6 million), working capital (RM10.58 million), as well as estimated listing expenses (RM3.9 million).
Farm Price managing director Dr Tiong Lee Chian said with the upcoming proceeds from the IPO, the company can accelerate its strategic expansion plans to grow much faster and capture the rising demand for fresh produce.
He added that the company also plans to increase the built-up area of its Senai Centralised Distribution Centre from 78,721 sq ft to 149,548 sq ft, constructing additional office space, cold room facilities, and ambient operational and warehouse areas.
"We will establish additional regional distribution centres with cold room facilities in Nilai, Negeri Sembilan and Cameron Highlands, Pahang, along with a new sales and marketing office in Singapore.
"We will also invest in new machinery and equipment to optimise workflow efficiency and automate processes. "This is in anticipation of increase in customer orders, while simultaneously reducing reliance on manual labour," he said during Farm Price's prospectus launch here today.
Tiong also said that the fresh vegetable industry is part of Malaysia's food security agenda, as it is an essential industry that directly affects the general population in terms of sustenance of life, health and cost of living.
Applications for the public issue are open from today and will be closed on April 30, 2024 at 5pm.
The company is scheduled to be list on the ACE Market of Bursa Malaysia on May 14, 2024.
Alliance Islamic Bank Bhd is the principal adviser, sponsor, sole underwriter and placement agent for the IPO exercise.