KUALA LUMPUR: Logistics services provider KGW Group Bhd, en route to a listing on Bursa Malaysia’s ACE Market on Aug 1, plans to raise RM16.73 million from its initial public offering (IPO) for business expansion.
The company plans to use RM2 million (11.95%) from the IPO for renovation of its target property, a three-storey office building and an adjacent two-storey warehouse.
In addition, it will use RM0.73 million (4.36%) of the proceeds for working capital, RM10 million (59.78%) to repay bank borrowings and the remaining RM4 million (23.91%) for estimated listing expenses.
Managing director Roger Wong said that while the group has a strong presence in the United States, it aims to grow its business to other foreign markets.
“We will continue to grow the US market because we feel it’s a great market. Moving forward, we want to also grow in the Asian (market), China is a huge country ... the Middle East. Maybe Canada, South America. We will continue to grow all other regions, not just focusing on the US market,” he told reporters during a press conference after the launch of KGW Group’s prospectus, recently.
Wong said the group is an asset-light logistics provider and will continue with the same model but does not discount a possibility of acquiring assets in the future.
“At this moment, with our expertise and what we have been doing, we will continue with this asset-light model. But in the future if there’s an opportunity to acquire assets that can really grow our business, raise revenue and profit, we’ll definitely look into it as well,” he added.
At an issue price of 21 sen per share, the IPO entails an issuance of 79.66 million new shares. Upon listing, it is expected to have an enlarged issued share capital of 482.80 million shares and a total market capitalisation of RM101.39 million.
Of the 79.66 million new shares, 24.14 million new shares (5.00%) will be made available to the Malaysian public via balloting; 9.66 million new shares (2.00%) for its eligible directors and employees as well as persons who have contributed to the success of its group and subsidiaries.
Additionally, 7.24 million new shares (1.50%) will be made available by way or private placement to selected investors, while the remaining 38.62 million new shares (8%) are earmarked for private placement to selected bumiputera investors approved by the Ministry of Investment, Trade and Industry and selected investors, including its cornerstone investor.
TA Securities is the principal adviser, sponsor, underwriter and placement agent for the IPO while Eco Asia is the financial adviser.
