KUALA LUMPUR (July 31): Butterfield FB Bhd, a manufacturer of coffee and tea extract powders, has signed an underwriting agreement with M&A Securities for its planned listing on the ACE Market.

Listing has been scheduled for September, the Penang-based company said in a statement. M&A Securities will underwrite the shares reserved for the Malaysian public, as well as for eligible persons under the “pink form” allocation.

“The signing of the underwriting agreement with M&A Securities brings us one step closer to our upcoming IPO on the ACE Market,” said Butterfield chief executive officer Lee Mong Khai.

A family-run and owned business, the company mainly produces coffee and tea extract powder blends for manufacturers of instant beverages, ready-to-drink products, functional food and beverages, and confectionery.

Butterfield also trades third-party food ingredients and instant beverage premixes. Malaysia and Thailand are its largest markets.

Proceeds from public issue of new shares will mainly be used to expand its production facility in Bukit Minyak, Penang.

The expansion is expected to more than triple annual production capacity to nearly 12,600 tonnes and increase storage capacity by 17%. The plan also calls for a new manufacturing line dedicated to matcha powder blends.

Proceeds from the proposed IPO will also be used to finance purchase and installation of a powder preparation system, mixing system, and packing system, as well as the related mechanical and electrical works. The rest will be used as working capital and to defray listing expenses.

“As manufacturers introduce new beverage formats such as instant beverage premixes and ready-to-drink products, demand for customised coffee and tea extract powder blends is expected to grow, supporting our expansion plans and long-term prospects,” said Lee

Founder and non-executive deputy chairman Yeap Kim Siew and his son Yeap Chin Loon, who is also an executive director, will be offering part of their existing shares in Butterfield in the IPO.

M&A Securities is the adviser, sponsor, underwriter and placement agent for the IPO.