KUALA LUMPUR: Homegrown bakery products manufacturer and distributor SDS Group Bhd expects to raise RM23.99 million under its proposed listing on the ACE Market of Bursa Malaysia Securities Bhd (Bursa Securities).
The company plans to use RM6.00 million (25.0%) raised from the initial public offering (IPO) to expand its business presence for both the wholesale and retail channels within the northern and central regions of Peninsular Malaysia respectively with the additional capacity from its new manufacturing plant in Seremban.
It will further utilise RM7.79 million (32.5%) for general working capital requirements; RM7.00 million (29.2%) to repay bank borrowings while the remaining RM3.20 million (13.3%) to be used to defray listing expenses for the IPO.
SDS Group managing director Tan Kim Seng said the company will increase the number of fleet of lorries for the northern region of Peninsular Malaysia and Seremban manufacturing plant to support the distribution of its wholesale bakery products.
The company also plans to set up eight new food and beverages (F&B) outlets within the established residential areas in the Klang Valley. Currently, SDS Group has 33 F&B outlets including five outlets under licensing agreement in Johor.
“Our business strategies to increase our fleet of lorries to expand to the central and northern regions of Peninsular Malaysia as well as increase the number of F&B outlets are expected to provide business growth in terms of revenue increase and earnings contribution,” he said in a statement.
Under the listing exercise, SDS Group is issuing 104.29 million new shares at 23 sen per share of which 20.29 million new shares will be made available to the public via balloting; 23.13 million new shares for its eligible directors, employees and business associates/persons while the remaining 60.87 million new shares are earmarked for private placement to selected investors.
The IPO is open for subscription from today to Sept 23, 2019. SDS Group’s listing on the ACE Market of Bursa Securities is tentatively scheduled on Oct 7, 2019.
M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO exercise.
