KUALA LUMPUR (July 19): Sik Cheong Bhd, which repackages and sells cooking oil, launched its initial public offering (IPO) that would raise RM23.22 million ahead of its listing on the ACE Market.
The IPO shares are priced at 27 sen a piece, according to the prospectus unveiled on Friday. The offering involves public issue of 66 million new shares, which would raise RM17.82 million for the company, and an offer for sale of 20 million existing shares.
Applications for the IPO will close on July 30, and Sik Cheong is slated to be listed on the ACE Market on Aug 13.
Under the IPO, Sik Cheong is marketing 13.3 million shares to the Malaysian public and four million shares for eligible persons. The company will also offer 48.7 million shares to select investors through private placement.
Sik Cheong is mainly involved in the repackaging, marketing and distribution of refined, bleached and deodorised (RBD) palm olein, with its primary revenue contributor coming from cooking oil products sold under its in-house brands.
The RBD palm olein repackaging industry in Malaysia is projected to grow at average annual growth of 20.9% to reach RM12.8 billion in 2026, Sik Cheong managing director Wong Hing Ngiap said in a statement.
“With the expected proceeds from the IPO, we can accelerate our strategic expansion plans, and capture a bigger market share in the industry,” he said.
The bulk of the IPO proceeds will be used to set up a new packaging facility by rebuilding the factory next to Sik Cheong's current facility. Upon completion, the company’s total operational space will increase by 88.1% to about 38,525 sq ft, Wong noted.
The company also plans to purchase new machinery and equipment, as well as new delivery trucks. One-third of the proceeds from the new share sale will also fund working capital, while the rest will be used to cover listing expenses.
Proceeds from the offer for sale totalling RM5.4 million will accrue entirely to the selling shareholders, Wong and his brother Hin Loong, who is an executive director of the company.
The Wong brothers co-founded Sik Cheong, a partnership business registered in 1967 involved in the retail and wholesale of sundry goods. They began delivery of RBD palm olein oil products to customers in 1997, while the partnership ceased its business in May 2018.
TA Securities is the principal adviser, sponsor, sole underwriter and placement agent for the IPO.