KUALA LUMPUR: Unitrade Industries Bhd has entered into an underwriting agreement with M&A Securities Sdn Bhd in conjunction with its upcoming initial public offering (IPO) on Bursa Malaysia’s ACE Market.
In a statement, it said Unitrade’s IPO exercise involves a public issue of 312.5 million new shares, representing 20 per cent of its enlarged share capital, as well as an offer for sale of 125 million existing shares.
Out of the 312.5 million new shares, 78.1 million shares will be made available to the Malaysian public via balloting, 63.5 million shares to its eligible directors, employees and persons who have contributed to the success of the group (Pink Form allocations) and 53.7 million shares for private placement to selected investors.
Additionally, 117.2 million shares are reserved for private placement for Bumiputera investors approved by the Ministry of International Trade and Industry (MITI).
As for the 125.0 million shares for sale, 78.1 million shares will be offered via private placement to MITI-approved Bumiputera investors, and 46.9 million shares will be placed out to selected investors.
Under the agreement, M&A Securities will underwrite 141.6 million new shares, comprising portions for the Malaysian public and Pink Form allocations.
Selangor-based Unitrade is a wholesaler and distributor of building materials, with an extensive range of 6,319 stock-keeping units (SKUs) such as pipes, valves, fittings and accessories for mechanical and electrical (M&E) works, as well as steel products and other building materials for civil works.
It has a vast network of 483 local and overseas suppliers, serving 1,232 active customers which include M&E contractors, building contractors, traders, manufacturers and retailers.
Unitrade is also involved in the manufacturing and sale of pre-insulated pipes and provides rental of temporary structural support equipment for building construction activities.
“The signing of the underwriting agreement with M&A Securities marks the beginning of the final leg in our listing journey.
“The listing has multifaceted benefits beyond the estimated RM100.0 million proceeds to be raised, as it will enhance our brand exposure and stature in the eyes of our lenders, customers and suppliers, which could improve our credit and financing options,” said Unitrade’s managing director Nomis Sim Siang Leng.
He said with the reopening of the international borders, there would be more infrastructure and building projects announced, leading to higher demand for building materials.
According to the Ministry of Finance, the construction industry’s gross domestic product (GDP) is projected to grow by 11.5 per cent to RM59 billion in 2022.
“As one of the largest wholesalers and distributors of building materials in the country, Unitrade is poised to gain from this impending industry uptrend,” Sim said.
Unitrade is scheduled to be listed on the ACE Market of Bursa Malaysia by May 2022, with M&A Securities as the adviser, sponsor, underwriter, and placement agent for the IPO exercise. – Bernama
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