KUALA LUMPUR (June 28): ACE Market-bound Sik Cheong Bhd has entered into an underwriting agreement with TA Securities Holdings Bhd in conjunction with its upcoming initial public offering (IPO).

In a statement on Friday, Sik Cheong said the company’s IPO exercise comprises a public issuance of 66.0 million new ordinary shares representing 24.8% of its enlarged share capital, and an offer for sale of 20.0 million existing shares or 7.5% of its enlarged share capital, via private placement to selected investors.

Out of the 66.0 million new shares, 13.3 million shares will be made available to the Malaysian public through balloting, 4.0 million shares to its eligible directors, employees and persons who have contributed to the success of Sik Cheong, while the remaining 48.7 million shares are reserved for private placement to selected investors.

Pursuant to the underwriting agreement, TA Securities shall underwrite 17.3 million new shares made available to the Malaysian public and pink form allocations.

Sik Cheong is principally engaged in the repackaging, marketing and distribution of RBD palm olein oil products. RBD palm olein is a refined, bleached and deodorised liquid form of palm oil.

The group also trades third-party products, mainly margarine, upon requests from customers.

RBD palm olein oil products are the primary revenue contributor to Sik Cheong.

These products, mainly cooking oil, are sold under in-house brands “Sawit Emas” and “Vitamas”, alongside unbranded options.

Sik Cheong’s products cater to both commercial and household markets, with a wide customer base of over 500 customers per annum.

Sik Cheong managing director Wong Hing Ngiap said the company is a sustainable business, given that RBD palm olein cooking oil is an essential food ingredient used in a diverse range of daily food manufacturing and preparation processes.

“RBD palm olein oil also offers a more cost-effective option over alternatives, making it one of the most widely-consumed cooking oils. “Now, backed by over thirty years of track record and having established a solid presence in Klang Valley, we are ready to take the next step forward,” he said.

Sik Cheong is scheduled to be listed on the ACE Market of Bursa Securities by the third quarter of 2024, with TA Securities as its principal adviser, sponsor, sole underwriter and placement agent for the IPO exercise.