KUALA LUMPUR (Oct 14): SPB Development Bhd, a real estate developer, filed for an initial public offering (IPO) on the Main Market of Bursa Malaysia to raise funds to acquire more land and finance existing projects.

The company is in the midst of conducting feasibility studies to expand or replenish its landbank for future developments in Selangor, Penang, Kedah, Melaka and Johor, SPB said in the draft prospectus. However, the Melaka-based company noted that it has yet to begin any negotiations for the purchase.

Part of the proceeds will also be used as working capital for upcoming residential development phases in Lunas in Kedah, and Banting in Selangor, estimated to cost RM210 million, SPB said.

“Going forward, we intend to continue growing our presence in industrial areas, starting with our forthcoming Banting development in Selangor, which we believe has growth potential,” SPB said. The project still has seven future phases to go, with a gross development value (GDV) of RM332 million.

SPB has three ongoing projects — Taman Nuri in Melaka, Taman La Casa Lunas in Kedah, and Taman Akasia in Johor — with a total GDV of RM389 million. The company still has 664 acres of undeveloped landbank throughout the country.

The proposed IPO involves a public issue of 191.1 million new shares and an offer for sale of 87.3 million existing shares. All in all, the listing offers investors up to 30% stake in the company, that made a net profit of RM46.02 million on revenue of RM200.81 million in 2023.

The institutional tranche comprises 231.4 million shares to institutional and selected investors, including Bumiputera investors, at a price to be determined by bookbuilding. The retail tranche, meanwhile, will see 47.1 million shares allocated to the Malaysian public and eligible persons at retail price. The final price will be the lower of the prices for retail and institutional tranches.

SPB said part of the proceeds have also be earmarked for the purchase of aluminium formwork for upcoming development projects in Banting, Selangor and Seberang Perai Utara, Penang. The rest will be used to defray listing expenses.

Any proceeds from the offer for sale, meanwhile, will accrue entirely to executive chairman Datuk Yap Pit Kian, who founded SPB. After the IPO, his near-complete control in SPB will be diluted to a 2% direct, and 60% indirect stake through the family vehicles PKYap Family Capital Sdn Bhd and PK Holdings Sdn Bhd.

His son Datuk Jacky Yap is currently SPB’s chief executive officer, while another son Datuk Sean Yap, is the chief financial officer. Yap Lih Shyan, the daughter, is the chief operating officer of SPB.

Hong Leong Investment Bank is the IPO’s principal adviser, bookrunner and underwriter, while Sierac Corporate Advisers is the financial adviser.