ACE Market-bound Sorento Capital Sets IPO at 37 Sen a Share to Raise Up to RM84.7m

(From left) Sorento Capital Bhd executive directors Lee Chee Keong and Jayden Loo Jing Kai, managing director Loo Chai Lai and independent non-executive chairman Ahmad Zakie Ahmad Shariff, Alliance Islamic Bank Bhd chief executive officer Rizal IL-Ehzan Fadil Azim and Lim Shueh Li, the bank's head/senior vice-president of coverage and origination for Islamic capital markets, at the prospectus launch on Monday. (Photo by Low Yen Yeing/The Edge)

KUALA LUMPUR (Oct 7): Bathroom and kitchen ware firm Sorento Capital Bhd has priced its initial public offering (IPO) at 37 sen per share to raise RM84.73 million on the ACE Market.

The proposed IPO involves public issue of 155 million new shares and an offer for sale of up to 74 million existing shares, according to the prospectus launched on Monday. All in all, the listing offers investors up to 26.62% stake in the company.

The offering will close on Oct 15, and listing has been scheduled for Oct 28.

“The proceeds from our IPO will enable us to strengthen our support for dealers through subsidies,” said Jayden Loo Jing Kai, the executive director of Sorento Capital. “We also plan to recruit around 200 new dealers nationwide over the next three years.”

Under the public issue that would raise RM57.35 million, the company is allocating 43 million new shares to the public, 16 million shares for eligible persons, and 96 million shares to Bumiputera approved investors through private placement.

More than half of the proceeds have been earmarked for the purchase of inventories. The company will also use 10% for branding and promotions, and another 10% for expansion of its dealer network.

Sorento will also utilise 16% for repaying bank borrowings, and the rest to defray listing expenses.

“To further fuel our growth, we aim to increase our participation in project-based sales, targeting building segments such as affordable housing, hotels, and offices,” said Jing Kai. “This will involve both new construction and renovation projects.”

Sorento is also the authorised distributor for foreign luxury third-party brands of bathroom and kitchen sanitary ware products, including the non-exclusive distributorship of the German brand "Bravat", and the exclusive distributorship of the Spanish brand "Infinity" in Malaysia.

The offer for sale — involving private placement to select investors and approved Bumiputera investors — will gross RM27.38 million, which will accrue entirely to Sorento Capital managing director Loo Chai Lai, who is Jing Kai's father.

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

Source: TheEdge - 8 Oct 2024