KUALA LUMPUR (April 24): Farm Price Holdings Bhd on Wednesday began taking orders from investors for its initial public offering (IPO) on the ACE Market to raise up to RM32.4 million.
The IPO, priced at 24 sen apiece, involves a public issuance of 102 million new shares as well as an offer for sale of 33 million existing shares, according to its prospectus. All in, the listing offers investors a 30% stake in the Johor-based wholesalers and vegetables distributor.
The application period for the IPO will close on April 30, with the listing scheduled for May 14.
Farm Price is mainly involved in the wholesale and distribution of fresh vegetables. The company also operates a retail store in Ulu Tiram, Johor selling fresh vegetables together with food and beverages products and other groceries directly to end-consumers.
The company has regional distribution centres across northern, central as well as southern regions of Peninsular Malaysia, alongside a centralised distribution centre in Johor serving both the Malaysian and Singapore markets.
Under the public issue, 22.5 million new shares will be made available to the Malaysian public, followed by 11.25 million shares for eligible persons and 68.25 million shares set aside for private placement to select investors.
Proceeds from the sale of new shares will total RM24.48 million, of which Farm Price plans to allocate 43% for working capital and 26% for the construction of new facilities.
The company will also spend 8% of the gross for the purchase of machinery, equipment, and logistics fleet, and 7% for a planned regional distribution and procurement centre. The remaining 16% is set aside to cover listing expenses.
The offer-for-sale of existing shares meanwhile will raise RM7.92 million that will go entirely to selling shareholders, managing director Dr Tiong Lee Chian and executive director Liew Tsuey Er, who is also Tiong’s wife.
At the listing price of 24 sen per share, the company will be valued at 12.4 times the net profit of RM8.7 million for the financial year ended Dec 31, 2023 (FY2023). Revenue rose 21% to RM114.2 million thanks to higher sales of both wholesale and retail segments.
Domestic market made up 75% of its revenue while exports to Singapore accounted for 25%.
Alliance Islamic Bank Bhd is the principal adviser, sponsor, sole underwriter and placement agent for the IPO exercise.