Farm Price signs underwriting deal with alliance islamic Bank for IPO

KUALA LUMPUR: Farm Price Holdings Bhd has entered into an underwriting agreement with Alliance Islamic Bank Bhd in conjunction with its initial public offering (IPO) on the ACE Market of Bursa Malaysia.

In a statement, the Johor-based wholesaler and retailer of fresh vegetables, food and beverage products and other groceries said the IPO exercise comprises a public issuance of 102 million new ordinary shares, representing 22.67% of its enlarged share capital, as well as an offer for sale of 33 million existing shares, or 7.33% of its enlarged share capital, via private placement to selected investors.

Of the new shares, 22.5 million will go to the Malaysian public via balloting, 11.25 million shares to its eligible directors, employees and persons who have contributed to the success of Farm Price, while the remaining 68.25 million shares will go towards private placements to selected investors.

Alliance Islamic Bank will underwrite the 33.75 million new shares made available to the Malaysian public and pink form allocations.

It also operates a retail store in Ulu Tiram, Johor to sell fresh vegetables, food and beverage products and other groceries directly to end-consumers.

Farm Price managing director Tion Lee Chian said the company plans to construct additional facilities to expand its centralised distribution centre in Senai, Johor, which is expected to double the size of its current facilities.

“In addition, we will also establish additional regional distribution centres with cold room facilities in Nilai, Negri Sembilan and Cameron Highlands, Pahang, and set up a sales and marketing office in Singapore.

“These initiatives will allow us to expand our operational facilities and market coverage for business growth,” he said.

Farm Price is scheduled to be listed on the ACE Market by May 2024, with Alliance Islamic Bank as the principal adviser, sponsor, sole underwriter and placement agent for the IPO exercise.