KUALA LUMPUR (Sept 3): Farm Fresh Bhd (KL:FFB) plans to raise up to RM200 million through a private placement, mainly to fund its capital expenditure and to settle a shareholder buyout obligation at its ice-cream unit Inside Scoop.
In a bourse filing on Thursday, the group said it plans to issue up to 109.65 million new shares, equivalent to 5.8% of its enlarged issued share capital, to third-party investors at an issue price to be determined later.
Of the RM200 million in proceeds, RM148.3 million has been earmarked for capital expenditure over the next 24 months, which will be split between RM92 million for expanding processing and dairy farming operations in Cambodia, including new production lines and an integrated dairy farm project in Pursat province, and RM56.3 million for expanding manufacturing capacity in Malaysia and developing new product lines.
A further RM50 million has been set aside to fund the purchase of a 20% stake in ice-cream brand The Inside Scoop Sdn Bhd, which is Farm Fresh’s 65%-owned subsidiary. The remaining stake is held by Edmund Tan Jun Hua, who last week exercised a contractual option requiring Farm Fresh to buy back part of his holding.
“The proposed private placement is necessary to provide the group with financial flexibility of preserving the group’s existing cash reserves for its ongoing operational requirements, while improving debt headroom to support its business expansion initiatives,” said Farm Fresh.
On a pro forma basis, the placement — combined with the potential exercise of outstanding employee share options — would lift Farm Fresh’s enlarged share base to about 2.01 billion shares worth RM642.39 million.
Net assets per share would rise to 51 sen from 42 sen, while gearing would fall to 0.52 times from 0.89 times, supported in part by the group’s repayment of about RM202.8 million in sukuk after its March financial year-end.
The group added that the placement is not expected to have a material impact on earnings for the current financial year, though earnings per share will be diluted by the enlarged share count.
Farm Fresh expects to complete the private placement by the third quarter of 2026.
For its first quarter ended June 30, 2026, net profit was down 18% to RM26.82 million due to higher costs of fuel and plastic bottle. Revenue, however, rose 18% to a new record of RM306.37 million, fuelled by orders from mini markets and e-commerce in Malaysia along with higher exports to Cambodia and stronger sales in the Philippines.
At market close on Thursday, shares of Farm Fresh were up one sen or 0.5% at RM1.99, valuing the group at RM3.75 billion.