KUALA LUMPUR (Sept 3): Food and supplement company OB Holdings Bhd said on Tuesday it has signed an agreement with Alliance Islamic Bank Bhd to underwrite in its upcoming initial public offering (IPO) on the ACE Market.

Under the agreement, Alliance Islamic Bank will underwrite shares to be offered to the Malaysian public and eligible persons under the pink form allocation, OB Holdings said in a statement. The company is eyeing a listing by the fourth quarter of 2024.

““The signing of this underwriting agreement brings us one step closer to listing our group on the ACE Market,” said OB Holdings managing director Teoh Eng Sia.

OB Holdings mainly manufactures the so-called fortified food and dietary supplements under various house brands, as well as for third-party brand owners.

The company also offers contract packing services for various products such as milk powder, tea leaves, honey, herb powder, fruit powder and liquid chlorophyll into retail packaging sizes, along with the trading of milk powder and other activities.

OB Holdings received the green light from Bursa Malaysia in April and the company will have six months to complete the IPO from the approval date.

Proceeds from the IPO have been earmarked for repayment of bank borrowings, purchase of machines, product development, marketing and advertising, and working capital requirements, as well as to defray listing expenses.

To support its strategic growth initiatives, Teoh said the group has begun the construction of a new factory in Serendah, Selangor. This expansion, he noted, will also allow the company to enhance its manufacturing capacity and product development by introducing new machines and laboratories.

"We see growth potential driven by several key trends,” he said. “The rise of non-communicable diseases and infections is increasing health awareness, leading to greater demand for fortified F&B and dietary supplements.”

The proposed IPO involves a public issue of 120.00 million new ordinary shares, offering investors a 30.64% stake in the company, according to its draft prospectus. There is no sale of existing shares.

Under the public issue, OB Holdings is offering 19.6 million new shares to the Malaysian public via balloting and another 7.8 million shares made available to its eligible directors, employees and persons who have contributed to the success of the company.

The remaining shares will be issued by way of private placement, whereby 43.6 million shares will be allocated to selected investors and 49 million shares will be set aside for identified Bumiputera investors approved by the Ministry of Investment, Trade and Industry of Malaysia.

Alliance Islamic Bank is the principal adviser, sponsor, sole underwriter and placement agent for the IPO exercise.