Saliran Group Berhad Signs Underwriting Agreement With Malacca Securities For IPO Exercise

KUALA LUMPUR, 21 JANUARY 2025 – Saliran Group Berhad ("Saliran" or the "Company"), an established supplier and distributor of pipes, fittings and flanges as well as related parts and accessories, and steel products, has announced the signing of an underwriting agreement with Malacca Securities Sdn Bhd ("Malacca Securities") for its upcoming initial public offering ("IPO") on the ACE Market of Bursa Malaysia Securities Berhad ("Bursa Securities").

Established in 2011, Saliran and its subsidiaries (“Group”) has built a reputation for delivering high-quality products such as pipes, fittings and flanges as well as steel products that are primarily used in the oil and gas (“O&G”) industry to support industrial processing, refining and manufacturing activities. Pipes, fittings and flanges sold by Saliran comprise third-party brands products and products labelled under its jointly-owned brand, namely “THF”. Saliran also undertakes the manufacturing of custom fittings and flanges, providing tailored solutions to meet specific industry needs. With an extensive network spanning Malaysia, Indonesia, Singapore, China, South Korea and Vietnam, the Group is well-positioned to capitalise on opportunities in industrial and infrastructure development across Southeast Asia.

Saliran's IPO involves the issuance of 80.4 million new shares (“Issue Shares”), which accounts for 21.0% of the Company’s enlarged issued share capital of 382.9 million shares, alongside an offer for sale of 38.3 million shares (“Offer Shares”), representing 10.0% of the enlarged issued share capital.

The allocation of IPO shares is structured as follows:

Public Issue

·       Malaysian Public:

o   19.15 million Issue Shares or 5.0% of the Company’s enlarged issued share capital, with 2.5% for public investors and the remaining half of 2.5% reserved for Bumiputera public investors.

·       Eligible Persons:

o   7.66 million Issue Shares or 2.0% of the Company’s enlarged issued share capital will be allocated to eligible directors and employees through Pink Form Allocations.

·       Private Placement to Bumiputera Investors:

o   47.86 million Issue Shares or 12.5% of the Company’s enlarged issued share capital reserved for selected Bumiputera investors approved by the Ministry of Investment, Trade and Industry ("MITI").

o   5.73 million Issue Shares or 1.5% of the Company’s enlarged issued share capital by way of private placement to selected investors.

Offer for sale

·       38.29 million Offer Shares or 10.0% of the Company’s enlarged issued share capital by way of private placement to selected investors.

Under this agreement, Malacca Securities will underwrite 26.80 million Issue Shares designated for the Malaysian public via public balloting and Pink Form Allocations. The remaining 53.60 million Issue Shares will be issued to selected Bumiputera investors approved by the MITI and selected investors as well as 38.29 million Offer Shares to be offered to selected investors.

Mr. Liaw Choon Wei, Managing Director of Saliran said, “This underwriting agreement marks an important milestone in Saliran’s path to becoming a public listed company. With our reputation for delivering high-quality products and our customer-focused approach, this IPO will help drive our growth strategy. Expanding our presence in Indonesia and increasing inventory capacity are key steps in seizing emerging market opportunities in Southeast Asia.”

Ms. Lim Chia Wei, Managing Director of Malacca Securities added, “Saliran’s extensive footprint in the industrial supply chain, particularly in oil and gas, positions the company as a strong contender on the ACE Market. Supported by a capable and customer centric leadership team and diverse product offerings, the Group is well-equipped to meet the rising demand from industrial clients in the region. This IPO will further enhance Saliran’s competitive positioning and growth trajectory.”

The prospectus exposure highlights promising growth potential for Saliran’s products. Pipes, fittings, and flanges are used for the transfer of fluid and gaseous substances in production and refining / processing activities, whilst steel products are used as structural support for the installation of pipes, fittings and flanges and/or for the construction of process plants. PETRONAS, Malaysia's national oil company, increased its domestic capital expenditure (“CAPEX”) to RM26.20 billion in 2023 and plans RM300.00 billion in the next five years, creating robust demand for industrial piping systems and steel products. In Indonesia, the consumption of pipes, fittings, and flanges surged with a CAGR of 22.98% from IDR21.00 trillion (RM6.09 billion) in 2021 to IDR31.76 trillion (RM9.50 billion) in 2023, while structural steel demand grew at a CAGR of 12.24% from 2019 to 2023. These trends demonstrate a thriving market that Saliran is well-positioned to tap into.

Saliran obtained Bursa Securities’ approval for the listing on ACE Market of Bursa Malaysia on 7 November 2024. Saliran is scheduled to be listed on the ACE Market of Bursa Securities by March 2025, with Malacca Securities as the Principal Adviser, Sponsor, Underwriter and Placement Agent for the IPO exercise.