(From left) Agricore CS Holdings Bhd chairman Fu Yew Sun, managing director Oon Boon Khong and deputy chairman Datuk Keh Chuan Seng, with M&A Equity Holdings Bhd managing director Datuk Bill Tan and M&A Securities Sdn Bhd head of corporate finance Gary Ting at the prospectus launch. Agricore is principally involved in the distribution and production of food ingredients, including starch products, beans and pulses, grain products and food additives. (Photo by Sam Fong/The Edge)

KUALA LUMPUR (May 30): Food ingredient supplier Agricore CS Holdings Bhd (KL:AGRICOR) on Thursday began taking orders from investors to raise RM25.9 million under its initial public offering (IPO) exercise for its listing on the ACE Market of Bursa Malaysia.

The IPO, priced at 50 sen per share, comprises entirely 51.7 million new shares, representing 25.5% of the enlarged share capital, according to the company in a statement on Thursday.

For the financial year ended Dec 31, 2023 (FY2023), the company recorded a net profit of RM6.78 million or 4.5 sen per share. Based on the IPO price, this translates into a price-earnings ratio of 11 times.

Agricore is principally involved in the distribution and production of food ingredients, including starch products, beans and pulses, grain products and food additives. Its house brands include Pokok Agricore, SunRise, Bapas and Cap Pokok.

Of the 51.7 million new shares, 10.1 million new shares will be made available to the Malaysian public via balloting, followed by 10.1 million new shares for eligible persons.

Meanwhile, 25.4 million shares will be allocated to Bumiputera investors approved by the Ministry of Investment, Trade and Industry (Miti). The remaining 6.1 million shares will be allocated to selected investors by way of private placement.

The company plans to use 74% of the proceeds or RM18.9 million to purchase inventory and expand its sourcing and distribution business, of which RM13.7 million will be utilised for its Bukit Minyak premises, and the remaining RM5.2 million for a new regional storage facility in Klang, Selangor.

It also plans to use 10% of the proceeds or RM2.7 million to set up a new storage facility in Klang, with a built-up area of 30,000 sq ft. The remainder of the proceeds will be used for staff recruitment and listing expenses.

The offering will close on June 7, while the listing is scheduled for June 21.

M&A Securities is the advisor, sponsor, underwriter and placement for the IPO exercise.