ACE Market-bound Farm Price’s IPO oversubscribed by 91.35 times

Saturday 18 May 2024

KUALA LUMPUR (May 3): Fresh vegetables wholesaler and distributor Farm Price Holdings Bhd, which is set for listing on the ACE Market of Bursa Malaysia on May 14, said on Friday that its initial public offering (IPO) had been oversubscribed by 91.35 times.

Following the close of the application period for the IPO on April 30, Farm Price said it had received 16,647 applicants for 2.08 billion new shares worth RM498.66 million from the Malaysian public for the 22.5 million shares it allocated to the Malaysian public — representing an overall oversubscription rate of 91.35 times.

Of this, 9,895 applications for 1.03 billion shares were received for the Bumiputera portion, representing an oversubscription rate of 90.61 times. As for the public portion, 6,752 applications for 1.05 billion shares were received, representing an oversubscription rate of 92.08 times.

Meanwhile, the 11.25 million shares made available for eligible directors, employees and persons who have contributed to the success of the company have also been fully subscribed, it added.

Farm Price has also fully placed out the 68.25 million issue shares and 33 million offer shares made available by way of private placement to selected investors.

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. All in, the listing offers investors a 30% stake in the Johor-based company.

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.

Proceeds from the sale of new shares were expected to raise RM24.48 million, from 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 proceeds 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 its 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 its net profit of RM8.7 million for the financial year ended Dec 31, 2023 (FY2023), which it made on a revenue of RM114.2 million.

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.

Edited ByTan Choe Choe

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