KUALA LUMPUR (Oct 7): Unitrade Industries Bhd is seeking a listing on the ACE Market of Bursa Malaysia to raise funds for working capital, repayment of bank borrowings, as well as to fund a new pipe fabrication centre.

Unitrade, through its subsidiaries, is principally involved in the wholesale and distribution of building materials, manufacturing of pre-insulated pipes, as well as the rental of temporary structural support equipment.

According to its draft initial public offering (IPO) prospectus posted on the Securities Commission Malaysia's website, 281.25 million new shares will be issued under public issue.

Of this, 70.31 million new shares will be available for application by the Malaysian public and another 70.31 million new shares for application by eligible directors and employees, as well as persons who have contributed to the success of the company.

The remaining shares will be offered via private placement, comprising 105.46 million shares for Ministry of International Trade and Industry (MITI)-approved Bumiputera investors and 35.15 million shares for selected investors.

The IPO also comprises an offer for sale of 112.5 million existing shares by way of private placement, with 70.31 million shares for MITI-approved Bumiputera investors and 42.18 million shares for selected investors. 

For the financial year ended 2021 (FY21), Unitrade posted a lower revenue of RM1.02 billion compared with RM1.08 billion in FY20. The group recorded a revenue of RM1.05 billion in FY19. The group's revenue is mainly derived from its wholesale and distribution business, which accounted for over 96% of total revenue between FY19 and FY21.

Unitrade said it plans to consolidate its distribution and wholesale, and manufacturing operations under Syarikat Logam Unitrade Sdn Bhd (Unitrade), Ricwil (Malaysia) Sdn Bhd and Unitrade United Sdn Bhd (UUSB) within one location, to enhance the operational efficiency of its businesses. 

“Through this consolidation, we will be able to streamline the management of our resources and at the same time, resources can be shared among the individual business segments to reduce operational expenses.

“[Additionally], as our group is presently involved in the wholesale and distribution of pipes, we plan to enhance our offerings through the provision of value-added services for pipes, by setting up a pipe fabrication centre that provides end-to-end pipe services to our customers. With the centre, we can provide pipe cutting, grooving, threading, welding and painting services,” it added. 

On its dividend policy, Unitrade said the board intends to recommend a dividend of at least 30% of its annual audited consolidated profit after tax attributable to its shareholders. 

M&A Securities Sdn Bhd is the principal adviser for the IPO.