KUALA LUMPUR (April 15): Signature Alliance Group Bhd, a subsidiary of kitchen and wardrobe maker Signature International Bhd (KL:SIGN), has secured M&A Securities Sdn Bhd and Affin Hwang Investment Bank Bhd as the underwriters for its initial public offering on the ACE Market of Bursa Malaysia.

The interior fitting-out specialist, which is scheduled to be listed in June, signed an underwriting agreement with both M&A Securities and Affin Hwang on Tuesday. The two entities are also joint placement agents for the IPO, while M&A Securities is also the adviser and sponsor. 

The IPO involves a public issuance of 260 million new ordinary shares, representing about 26% of Signature Alliance Group's enlarged share capital. No existing shares will be sold.

The public issue sets aside 50 million shares for the Malaysian public, 30 million shares for eligible individuals who contributed to the company, and 20 million shares for a restricted offering to entitled shareholders of Signature International. There will also be a placement of 160 million shares to Bumiputera investors and selected investors. 

M&A Securities and Affin Hwang will jointly underwrite the 100 million new shares that are made available to the Malaysian public, the pink form allocations, and the entitled shareholders of Signature International.

"The IPO will provide funding for the company’s expansion, and enable the public to participate in SAG’s growth," said Signature Alliance Group executive director and group chief executive officer Darren Chang Chung Fei.

Signature Alliance Group primarily provides interior fitting-out services and building construction works. Its interior fitting-out services include project planning and management, customisation and supply of carpentry or joinery components and integrated fixtures, as well as the manufacturing of wooden furniture. It also undertakes installation services, building construction works, and air conditioning ducting projects, as well as ad hoc maintenance for projects it has completed.

Signature International owns a 50.7% stake in Signature Alliance Group, which will drop to 37.5% post-IPO. Chin Hin Group Bhd (KL:CHINHIN) controls Signature International with a 71.72% stake. Meanwhile, the 49.3% stake in Signature Alliance Group that are now in the hands of Chang, northern region CEO Foo Khai Shin, and central region CEO Ng Mun Moh will be reduced to 36.5% following the IPO. 

Proceeds from the IPO will be used to set up a corporate office and production facility in Selangor, purchase machinery and equipment, expand or establish branch offices in Penang and Johor, and to repay bank borrowings. The remaining funds will be used to meet working capital requirements, including hiring new drivers, and to cover listing expenses.

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