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 UNITRAD 0247 UNITRADE INDUSTRIES BERHAD's 78.13 million IPO shares oversubscribed by 2.35 times

KUALA LUMPUR (June 2): Unitrade Industries Bhd, which is expected to be listed on the ACE Market of Bursa Malaysia on June 14, said the 78.13 million shares made available for the public at 32 sen per share has been oversubscribed by 2.35 times.

The building materials wholesalers said it received a total of 7,169 applications for 261.95 million shares with a value of RM83.8 million.

“For the general public portion, a total of 3,684 applications for 39.06 million shares were received, translating to an oversubscription rate of 3.9 times,” Unitrade said in a statement on Thursday (June 2).

“For the remaining Bumiputera public portion, a total of 3,485 applications for 39.06 million shares were received, representing an oversubscription rate of 0.81 times.”

It added that the notices of allotment will be posted to all successful applicants on or before June 14.

Unitrade’s listing entailed a public issue of 312.5 million new ordinary shares at 32 sen per share, representing approximately 20% of the enlarged share capital of 1.56 billion shares.

Besides the 78.125 million shares offered to the Malaysian public, the company has also offered 117.18 million new shares to bumiputera investors approved by the Ministry of International Trade and Industry (MITI) and 63.5 million shares to its eligible directors, employees and persons who have contributed to the success of the company. On top of that, Unitrade placed out 53.68 million new shares to selected investors.

The company’s existing shareholders have also offered 125 million shares by way of private placement to selected investors.

Unitrade had sought to raise RM100 million for working capital, repayment of bank borrowings, as well as to fund a new pipe fabrication centre.

Its managing director Nomis Sim Siang Leng said the positive response reflected the market’s healthy interest and confidence in Unitrade’s business model and growth prospects.

“Looking ahead, we are confident in maintaining our positive growth momentum, driven by the rising construction activities and acceleration of large-scale infrastructure projects in the pipeline.

“With that in mind, the listing comes at an opportune time as we will deploy a large portion of our IPO proceeds as working capital to enhance our inventories range and product mix to meet the increasing demand for building materials.

“As a wholesaler and distributor, the additional working capital is essential for us to fuel our future growth. By tapping into the equity capital market, it allows us to achieve just that without incurring additional interest expenses,” he said.

M&A Securities Sdn Bhd is the advisor, sponsor, underwriter and placement agent for Unitrade’s IPO exercise.

Founded in 1979, Unitrade operates in Shah Alam, Selangor and serves 1,232 active customers nationwide including mechanical and electrical contractors, building contractors, traders, manufacturers, and retailers.

For the financial year ended March 31, 2021 (FY21), Unitrade posted a lower revenue of RM1.02 billion compared with RM1.08 billion in FY20. The group recorded a revenue of RM1.05 billion in FY19.

The group's revenue is mainly derived from its wholesale and distribution business, which accounted for over 96% of total revenue between FY19 and FY21.


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