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Farm Price Holdings Berhad’s IPO Oversubscribed by 91.35 Times

KUALA LUMPUR: Farm Price Holdings Berhad (“Farm Price”), a wholesaler and distributor of fresh produce, food and beverage (“F&B”) items, and other groceries based in Johor, has attracted substantial interest from investors for its initial public offering (“IPO”). The IPO has been oversubscribed by 91.35 times ahead of its listing on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”).

Farm Price, along with its subsidiaries, primarily engages in wholesale and distribution activities, serving markets in Malaysia and Singapore. Additionally, the group operates a retail outlet in Ulu Tiram, Johor, catering directly to end-consumers. With two decades of experience in fresh produce distribution, Farm Price currently operates its Senai Centralised Distribution Centre in Johor, equipped with cold room facilities for storage, processing, and packaging, alongside ambient temperature zones. Furthermore, the group’s operations are bolstered by six regional distribution centres in Johor, Selangor, Perak, and Penang, focusing on wholesale distribution of F&B products and groceries. Farm Price serves a diverse customer base, including supermarkets, minimarkets, grocery stores, wholesalers, food service operators, food manufacturers, and individual consumers.

The IPO of Farm Price comprises 450,000,000 ordinary shares, featuring a public issue of 102,000,000 new shares at an issue price of RM0.24 per share, representing 22.67% of the enlarged share capital. The public issue is expected to raise RM24.48 million. Additionally, there is an offer for the sale of 33,000,000 existing shares by way of private placement to selected investors.

Farm Price received a total of 16,647 applicants for 2,077,765,600 shares, valued at approximately RM498.66 million, for the 22,500,000 shares allocated to the Malaysian public, resulting in an oversubscription rate of 91.35 times. For the Bumiputera portion, 9,895 applications for 1,030,653,700 shares were received, representing an oversubscription rate of 90.61 times. Regarding the public portion, 6,752 applicants submitted requests for 1,047,111,900 shares, resulting in an oversubscription rate of 92.08 times.

The 11,250,000 shares available for application by eligible directors, employees, and contributors to the company’s success have been fully subscribed. Furthermore, the private placement of 68,250,000 shares and 33,000,000 offer shares made available for application by selected investors through private placement have also been fully placed.

All successful applicants will receive notices of allotment by 10 May 2024. Dr. Tiong Lee Chian, Managing Director of Farm Price, expressed gratitude for the overwhelming response to the IPO, reflecting confidence in the company’s fundamentals and prospects. With the IPO funds, Farm Price aims to expedite expansion plans to capitalize on growth opportunities within the fresh produce industry.

Dr. Tiong Lee Chian stated, “Amidst a fragmented landscape, Farm Price sets itself apart through experienced expertise, a diverse range of fresh produce, in-house infrastructure, a global sourcing network, and robust distribution channels. To strengthen our position in fresh produce distribution and drive further growth, our future plans include expanding our Senai Centralised Distribution Centre, purchasing machinery, equipment, and logistics fleet, establishing additional regional distribution centres, and setting up a sales and marketing office in Singapore.”

He emphasized the significance of the fresh vegetables industry for Malaysia’s food security and highlighted increasing demand in Singapore, fueled by Farm Price’s commitment to quality and value-added services. Dr. Tiong Lee Chian concluded by expressing excitement for expanding reach and meeting the growing demand for fresh vegetables in the city-state.

Farm Price is set to be listed on the ACE Market of Bursa Securities on Tuesday, 14 May 2024, with an anticipated market capitalization of approximately RM108.00 million based on an issue price of RM0.24 per share and an enlarged share capital of 450,000,000 shares.

Alliance Islamic Bank Berhad serves as the Principal Adviser, Sponsor, Sole Underwriter, and Placement Agent for the IPO Exercise.

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