KUALA LUMPUR (Jan 27): Sabah-based steel products manufacturer Colform Group Bhd's initial public offering (IPO) has seen strong investor interest, attracting RM462.46 million worth of retail subscriptions, more than 10 times the RM41.19 million it was looking to raise from the issuance of new shares via its IPO.
The public portion of the ACE Market-bound company's IPO, priced at 36 sen per share, received 19,669 applications for 1.28 billion new shares — significantly exceeding the 114.42 million shares it set aside for the Malaysian public. This reflects an overall oversubscription rate of 41.82 times, according to Tricor Investor & Issuing House Services Sdn Bhd, in a statement on behalf of Colform.
For the Bumiputera portion, it received 9,619 applications for 518.82 million new shares, representing an oversubscription rate of 33.59 times. The non-Bumiputera portion received 10,050 applications for 765.8 million new shares, for an oversubscription of 50.05 times.
Meanwhile, the six million shares it set aside for subscription by eligible persons who contributed to the group were fully subscribed. The shares it placed out — 75 million to selected investors, including eligible Bumiputera investors — were also fully taken up.
"Further, the sole placement agent has confirmed that the 3.42 million issue shares and 54 million existing shares by way of placement to selected investors were fully subscribed," Tricor Investor said, adding that the notices of allotment would be posted to successful applications on Feb 6.
Colform's IPO involves the public issue of 114.42 million new shares and an offer for sale of 54 million existing shares, according to its prospectus launched on Jan 15. Altogether, the listing will offer investors up to a 28.07% stake in the company.
Of the RM41.19 million gross proceeds from the public issuance, it plans to use RM18.09 million for working capital and RM9 million to set up a colour coil coating production line at its Kota Kinabalu factory. It will also use RM5.1 million for expansion into Peninsular Malaysia, and RM4.5 million to build a storage facility in Kota Kinabalu.
As for the offer for sale of existing shares, they will raise RM19.44 million for the selling shareholder Kang Ming Trading Sdn Bhd, whose shareholding will be trimmed to 71%, from 95%, after the IPO.
Kang Ming is owned by the Kang family under patriarch Kang Ah Hin, who serves as a non-executive director of Colform, which is scheduled to make its market debut on Feb 10 this year.
Mercury Securities Sdn Bhd is the sole principal adviser, sponsor, underwriter and placement agent for the IPO.