KUALA LUMPUR (May 27): Fertilizer company Cropmate Bhd has filed for an initial public offering (IPO) on Bursa Malaysia’s ACE Market to raise funds, including to part finance the acquisition of two factories for nearly RM30 million.

The proposed IPO comprises a public issue of 210 million new shares and an offer-for-sale of 50 million existing shares at prices to be determined later, Cropmate said in its draft prospectus posted to Bursa Malaysia. All in all, the listing would offer investors up to 35% in the company.

“We have been operating at our existing factory lot 8949 and factory lot 8950 since 2018, which are rented premises,” Cropmate said. “Part of our plans is to acquire our existing factories from a related party and directors,” it added.

Cropmate has also earmarked part of the proceeds for capital expenditure, including for new commercial vehicles and industrial equipment, as well as for the setting up of a research and development (R&D) and test laboratory.

The rest of the proceeds from the IPO will be used to repay bank borrowings, as working capital, and to defray listing expenses.

Cropmate formulates and blends conventional and specialty fertilisers, as well as trades straight fertilisers and related products. The company made a net profit of RM10.05 million, on the back of revenue totalling RM151.55 million for the financial year ended Dec 31, 2023 (FY2023).

The IPO involves an institutional tranche of 208 million shares to institutional and select investors through bookbuilding, as well as a retail offering of 51.66 million shares to the Malaysian public and eligible persons.

Proceeds from the offer-for-sale will go entirely to the selling shareholders — managing director Lee Chin Yok and his sons Lee Cheng Seng and Lee Cheng Fei, who are both executive directors; as well as to substantial shareholders Lau Sam Siong and Datuk Tan Chew Chin.

Hong Leong Investment Bank is the principal adviser, sponsor, underwriter and bookrunner for the IPO.