Seng Fong obtains approval for Main Market listing


Er Hock Lai

KUCHING (April 26): Seng Fong Holdings Bhd (Seng Fong), a rubber processor producing and trading Standard Malaysia Rubber (SMR) and premium grade block rubber, via its subsidiaries, has obtained the approval of the Securities Commission Malaysia to list on the Main Market of Bursa Malaysia Securities Berhad (Bursa Securities).

With history tracing back to 1986, Seng Fong is principally involved in the processing of SMR and premium grade block rubber as well as trading in block rubber, where its customers are mainly tyre manufacturers or international rubber traders.

The company also operates a Malaysian Rubber Board-approved laboratory for the testing, grading and certification of the processed block rubbers.

According to Seng Fong’s draft initial public offering (IPO) prospectus posted on the Securities Commission Malaysia website, the listing exercise involves the initial public offering of up to 160.87 million ordinary shares comprising a public issue of 90.81 million shares and an offer for sale of up to 70.06 million shares.

The IPO shares is divided into an institutional offering of up to 118.68 million shares representing 22.9% of the enlarged issued shares and, a retail offering of up to 42.20 million shares representing 8.1 per cent of the enlarged issued shares.

The institutional offering comprises 64.87 million IPO shares representing 12.5 per cent of the enlarged issued shares to bumiputera investors approved by the Ministry of International Trade and Industry; and 53.81 million IPO shares representing 10.4 per cent of the enlarged shares to other institutional and selected investors

Managing director of Seng Fong, Er Hock Lai said, “We would like to express our appreciation to the SC for approving our IPO on the Main Market of Bursa Securities. The listing will enhance our reputation and assist us in expanding our customer base globally while allowing us to gain access to the capital markets to raise funds for future growth opportunities.”

“The listing also enables us to raise the funds we need for the installation of a biomass system that will provide a source of fuel for our processing operations while at the same time achieve cost savings by reducing overall fuel costs.

“We are also installing two solar system units to help us lower electricity cost as well as help us achieve our sustainability goals of reducing greenhouse gas emissions.”

A portion of the proceeds from the listing will also go to working capital needs, which will include increasing production capacity and repaying bank borrowings, which includes a term-loan for the Solar Systems installation.

Group Managing Director/Chief Executive Officer of Hong Leong Investment Bank Berhad (HLIB), Lee Jim Leng said, “We congratulate Seng Fong for having received the approval of the SC for its listing and look forward to working with its management in preparing for the listing on the Main Market.

“Seng Fong is a solid business with a history going back to 1986 in an industry where demand continues to grow steadily. We have no doubt that the Company will find favourable reception with investors.”

Almost all of Seng Fong’s revenue is derived from sales to international customers for the financial years ended December 31, 2019 to 2021.

HLIB is the principal adviser, underwriter and placement agent for this IPO exercise.