Leform debuts on Bursa’s ACE Market
KUALA LUMPUR: Leform Berhad (Leform) has successfully debuted on the ACE Market of Bursa Malaysia Securities Berhad yesterday.
At the opening bell, Leform opened with a share price of 19.5 sen and trading volume of 8.37 million shares.
The integrated steel products manufacturer and trader raised a total of RM71.5 million from its initial public offering (IPO).
The group has allocated RM30.0 million (42 per cent) for the construction of new headquarters, warehouse storage facility and workers’ accommodation.
Meanwhile, RM21.9 million (30.6 per cent) and RM14.4 million (20.1 per cent) are earmarked for working capital and repayment of bank borrowings, respectively.
The remaining RM5.2 million (7.3 per cent) will be used for listing expenses.
Managing director Law Kok Thye said, “Our listing is part of a larger agenda of elevating Leform to the next growth phase in our corporate journey.
Most immediately, the RM71.5 million proceeds raised will enable us to execute our business expansion plan.
Aside from that, the new listing status could also generate positive ripple effects due to the greater overall confidence from our suppliers, employees, clients and bankers.”
“Although we currently possess sufficient production capacity, we are constrained by our storage space.
Thus, a substantial amount of the proceeds is catered towards solving that bottleneck.
With the new warehouse facility, we can boost up our storage area, improve operational efficiency via the consolidation of delivery operations and the adoption of a more systematic storage system, as well as unlock new revenue streams as we reconfigure some of our pipe mills for a greater product variety.
Meanwhile, the increased working capital and new workers’ accommodation are needed to support the output expansion anticipated.
Regarding its dividend policy, Leform endeavours to maintain a payout ratio of not less than 20 per cent of its annual audited net earnings.
MIDF Amanah Investment Bank Berhad is the principal adviser, sponsor, sole underwriter and sole placement agent for Leform’s IPO exercise.