KUALA LUMPUR: Integrated logistics service provider Sin-Kung Logistics Bhd expects to raise RM26 million from its initial public offering (IPO) en route to a listing on the ACE Market of Bursa Malaysia on May 15.
Managing director Alan Ong said the company plans to utilise RM10 million from the IPO proceeds to fund its warehousing and distribution services' expansion to meet the future rising demand from manufacturing and e-commerce sectors.
“We are already preparing for the future with the acquisition of our Valdor office and warehouse that will add an annual capacity of 192,000 pallets to cater to our customers in the northem region of Peninsular Malaysia when operations begin by the end of 2026.
“The Valdor warehouse, a built-to-suit warehouse, will provide more storage space to our existing five warehouses to serve more and larger orders from both our existing customers and potential customers, boosting the revenue of our warehousing and distribution services moving forward,” said Ong during the company's prospectus launch today.
Ong said that as of March 20, 2024, Sin-Kung Logistics operated five warehouses in Shah Alam and Port Klang in Selangor, Bukit Mertajam and Bukit Minyak in Penang with an aggregate annual capacity of 190,260 pallets.
A further RM2.0 million of the proceeds will be used to purchase 100 commercial vehicles by 2025 as part of its strategy to expand its trucking and container haulage businesses.
“The total cost of the 100 commercial vehicles are estimated at RM8 million. We intend to allocate RM2 million of the proceeds for the purchase of commercial vehicles and the balance of RM6 million will be funded from our internally-generated funds and/or bank borrowings,“ it said in the prospectus.
Meanwhile, the remainder of the proceeds will be used to repay bank borrowings amounting to RM9.6 million, working capital RM1.1 million and to defray the estimated listing expenses of RM3.3 million.
Under the listing exercise, Sin-Kung Logistics issued 200 million new shares and an offer for sale of 103.5 million existing shares, representing 16.7 per cent and 8.6% of the enlarged share capital of Sin-Kung Logistics respectively, at an issue price of 13 sen per share.
Out of the 200 million new shares, 60 million new shares will be made available to the Malaysian public via balloting, 45 million shares for its eligible directors, employees and persons who have contributed to the success of Sin-Kung Logistics group, while the remaining 95 million shares are reserved for private placement to Bumiputera investors approved by the Ministry of Investment, Trade and Industry (Miti).
As for the offer for sale portion, 55 million shares are reserved for private placement to Bumiputera investors approved by Miti, while the remaining 48.5 million shares will be allocated by way of private placement to selected investors.
Based on the enlarged share capital of 1.2 billion shares, Sin-Kung Logistics is expected to have a market capitalisation of RM156.0 million after listing.
The IPO is open for subscription from today to May 2. – Bernama
