KUALA LUMPUR (Aug 2): ACE Market-bound Sik Cheong Bhd has attracted RM770.37 million worth of interest for its initial public offering (IPO) shares from the Malaysian public, over 43 times the RM23.22 million that the cooking oil distributor aimed to raise.
The public portion of the IPO was oversubscribed by 213.53 times, with 26,395 applications received seeking 2.85 billion new shares in the company, Sik Cheong said in a statement on Friday. It had allocated 13.3 million new shares for the Malaysian public at 27 sen per share.
The applications received comprised 14,953 applications for 1.31 billion shares under the Bumiputera portion — representing an oversubscription of 195.40 times — and 11,442 applications for 1.55 billion shares under the non-Bumiputera portion for an oversubscription of 231.65 times.
The four million shares it set aside for subscription by eligible persons who contributed to the company were also fully subscribed. So too were the 48.7 million shares it made available for private placement to selected investors.
The 20 million shares that its existing shareholders offered for sale as part of the IPO were also fully taken up.
Sik Cheong's IPO involved the public issue of 66 million new shares — representing 24.8% of its enlarged share capital — to raise RM17.82 million for the company, and the offer for sale of the 20 million existing shares.
The company — which is expected to have a market capitalisation of about RM71.8 million upon listing based on an enlarged share capital of 266 million shares — is mainly involved in the repackaging, marketing and distribution of refined, bleached and deodorised (RBD) palm olein. Its primary revenue contributor comes from cooking oil products sold under its in-house brands.
"We are truly grateful for such a strong response to our IPO. This reaffirms our strategic direction and reinforces our commitment to creating value for our shareholders, as we continue to pursue growth opportunities in the distribution of essential food," said Sik Cheong managing director Wong Hing Ngiap.
“Our growth strategy involves expanding our product range to include high oleic soybean oil, where we have been receiving enquiries from food manufacturers and hotel operators. Leveraging our experience and existing customer base in offering RBD palm olein oil products, we believe we have a solid foundation to secure new orders and cross-sell this new product.
"Sik Cheong recognises the potential of high oleic soybean oil, supported by its affordability, wide availability, and the growing food and beverage industry in Malaysia. This makes it a strategic addition to our product portfolio, suitable for households, hotel, restaurant and catering operators, and food manufacturers,” Wong said.
The company will set aside 40% of the proceeds to build a new packaging facility to accommodate future expansion of the repackaged RBD palm olein oil business and the new venture into high oleic soybean oil, which will require additional space.
TA Securities is the principal adviser, sponsor, sole underwriter and placement agent for the IPO.