KUALA LUMPUR (Dec 6): Colform Group Bhd, a Sabah-based steel and building material specialist has inked an underwriting agreement with Mercury Securities Sdn Bhd in conjunction with its upcoming initial public offering (IPO) on the ACE Market of Bursa Malaysia.

The Sabah-based company said Mercury Securities will underwrite a total of 36 million issue shares made available for application by the Malaysian public and eligible persons.

The IPO entails a public issuance of 114.2 million new shares and an offer for sale of 54 million existing shares at a price to be determined later.

All in, the listing offers investors 28.07% stake in the company, based on its enlarged share capital of 600 million shares.  

Under the public issue, Colform will allocate 30 million new shares for the Malaysian public and six million shares for eligible persons. Additionally, 3.42 million shares will be privately placed to select investors, while 75 million shares are reserved for approved Bumiputera investors under the Ministry of Investment, Trade and Industry (Miti).

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

Part of the proceeds from the IPO will fund the establishment of an in-house colour coil coating production line at its Kota Kinabalu factory.

Colform is also planning a new storage facility at its Kota Kinabalu factory, scheduled for construction in early 2025. The facility, with a planned built-up area of 40,000 sq ft, aims to optimise logistics and inventory management as the company scales its operations.

The funds will also support Colform's expansion into Peninsular Malaysia through a new branch office and leased factory in Klang.

Furthermore, the company also plans to adopt an enterprise resource planning (ERP) system to streamline operations and enhance management efficiency across its locations.

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

Kang Ming Trading is controlled by the Kang family, led by patriarch Kang Ah Hin, who owns 15%, and his wife, Chu Nyuk Moi, with a 10% stake. He is also 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%).

Headquartered in Sabah, Colform’s offerings span various types of downstream steel products such as roofing sheets, wall claddings and IBS steel framing systems.

Mercury Securities Sdn Bhd is the principal adviser, sponsor, sole underwriter and sole placement agent for Colform’s IPO.