KUALA LUMPUR (July 11): Colform Group Bhd, a Sabah-based manufacturer of steel roofing, steel cladding and other related steel products, has filed for an initial public offering (IPO) on the ACE Market to raise funds to set up a new colour coil coating production line, to build a new storage facility, and to expand its business to Peninsular Malaysia.

The proposed IPO will involve a public issue of 114.42 million new shares and an offer for sale of 54 million existing shares at a price to be determined later, according to its draft prospectus. Altogether, the listing will offer investors up to a 28.07% stake in the company, based on its enlarged share capital of 600 million shares post-IPO.

Under the public issue, Colform will make 30 million new shares available for the Malaysian public and set aside six million new shares for eligible persons. The company will also sell 3.42 million new shares to select investors through private placement, and 75 million new shares to select Bumiputera investors approved by the Ministry of Investment, Trade and Industry.

Proceeds from the offer-for-sale of existing shares will accrue entirely to the selling shareholder, Kang Ming Trading Sdn Bhd, which will cut its holdings in the company from 98.68% to 70.86% post-IPO.

Kang Ming Trading is owned by the Kang family, under the patriarch Kang Ah Hin. He holds 15% in Kang Ming Trading while his wife Chu Nyuk Moi owns 10%. Kang is a non-independent non-executive director of Colform.

The remaining shares in Kang Ming Trading are held by siblings Kang Ket Hung (25%), who is also the managing director of Colform, Kang Phui Ting (15%) and Kang Phui Yie (20%), who are both non-independent executive directors in Colform, as well as Kang Ket Hao (15%).

Through its subsidiaries, Colform is principally involved in the manufacturing, processing and trading of steel products, as well as the trading of building materials.

From the proceeds of the IPO, Colform intends to buy new machinery to set up a new colour coil coating production line at its factory in Kota Kinabalu. "The new colour coil production line will complement and expand our group’s existing range of steel products to include colour coated coils as we currently do not manufacture colour coated coils and only purchase colour coated coils from our suppliers," it said.

In anticipation of the additional storage space needed to store raw materials and finished products of the new colour coil coating production line, Colform plans to build a new storage facility right beside its factory in Kota Kinabalu. The new facility is estimated to have a built-up area of 40,000 sq ft.  

Lastly, the group plans to set up a branch office and lease a factory in the Klang area to expand its business in Peninsular Malaysia, where it has no presence currently.

Mercury Securities Sdn Bhd has been appointed the principal adviser, sponsor, underwriter and placement agent for the IPO.