KUALA LUMPUR (April 4): Sorento Capital Bhd, a distributor of bathroom and kitchen sanitary ware products, has filed for an initial public offering (IPO) on Bursa Malaysia’s ACE Market to raise funds for its expansion.

The IPO is expected to involve a public issuance of 155 million new shares and an offer for sale of up to 74 million existing shares, according to the draft prospectus filed with Bursa Malaysia.

Under the public issue, 43 million shares will be made available to the public while 16 million shares have been set aside for eligible directors, employees and persons who have contributed to the group’s success. The remaining 96 million will be offered via a private placement to Bumiputera investors as approved by the Ministry of Investment, Trade and Industry (Miti).

Of the offer for sale, 62.5 million shares will be allocated to selected investors and 11.5 million to Bumiputera investors as approved by Miti, both by way of private placement.

Sorento said the funds raised from the IPO will be go towards advertising and branding initiatives and expanding its dealer network, with plans to enlist 200 new dealers nationwide within the next three years. The money will also be used to repay bank loans and bolster working capital for inventory procurement.

The group, through its wholly-owned subsidiaries Sorento Sdn Bhd, Beyond Bath Sdn Bhd, Nautical Sanitaryware Sdn Bhd, Ideal Bath Sdn Bhd and Mocha Sdn Bhd, has an extensive range of bathroom and kitchen sanitary ware products under its house brands Sorento, Mocha, Cabana and i-Born.

Sorento is also the authorised distributor in Malaysia for two foreign third-party brands of bathroom and kitchen sanitary ware products, namely Bravat and Infinity.

For the financial year ended June 30, 2023 (FY2023), the group’s net profit jumped 95.65% to RM24.93 million from RM12.74 million a year earlier as revenue grew 23.84% to RM112.31 million from RM90.69 million.

Alliance Islamic Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.