IPO Underwriting Inked with M&A, Unitrade Bound for Ace Market Listing

Photo caption (from left to right): · Mr. Gary Ting , Head of Corporate Finance of M & A Securities Sdn. Bhd. · Datuk Bill Tan, Managing Director of Corporate Finance of M & A Securities Sdn. Bhd. · Mr. Sim Keng Chor , Executive Vice Chairman of Unitrade Industries Berhad · Mr. Nomis Sim Siang Leng, Managing Director of Unitrade Industries Berhad · Mr. Simson Sim Xian Zhi, Executive Director of Unitrade Industries Berhad

Unitrade Industries has today entered into an underwriting agreement with M & A Securities in conjunction with its upcoming initial public offering (IPO) on the ACE Market of Bursa Malaysia.

Homegrown building materials wholesaler cum distributor’s IPO exercise involves a public issue of 312.5 million new shares, representing 20.0% of its enlarged share capital, as well as an offer for sale of 125.0 million existing shares.

Out of the 312.5 million new shares, 78.1 million shares will be made available to the Malaysian public via balloting, 63.5 million shares are Pink Form Allocations to its eligible directors, employees, and persons who have contributed to the success of the Group.

While 53.7 million shares for private placement to selected investors, a remaining portion of 117.2 million shares is reserved for Bumiputera investors approved by the MITI (Ministry of International Trade and Industry), which will also be done via private placement.

On the 125.0 million shares under offer for sale, 78.1 million shares will be offered via private placement to MITI-approved Bumiputera investors, and 46.9 million shares will be placed out to selected investors.

M&A Securities will underwrite 141.6 million new shares, comprising portions for the Malaysian public and Pink Form Allocations under the underwriting agreement.

To recap, Unitrade is a wholesaler and distributor of building materials. The Group carries an extensive range of 6,319 stock-keeping units such as pipes, valves, fittings, and accessories for mechanical and electrical works, as well as steel products, and other building materials for civil works. It has a vast network of local and overseas suppliers that totals around 483. The Group serves 1,232 active customers encompassing M&E contractors, building contractors, as well as traders, manufacturers, and retailers.

In addition, Unitrade is also involved in the manufacturing and sale of pre-insulated pipes and provides rental of temporary structural support equipment for building construction activities.

“We are delighted with the signing of the underwriting agreement with M&A Securities, as it officially marks the beginning of the final leg in our listing journey. The exercise comes with multifaceted benefits beyond the estimated proceeds to be raised. The listing status will enhance our brand exposure and Unitrade’s stature in the eyes of our lenders, customers, and suppliers, which could improve our credit and financing options,” Managing Director of Unitrade, Mr. Nomis Sim Siang Leng said.

“Following the reopening of the country’s international borders early this month, we are confident that the economic environment will return to a more vibrant state hereon. Subsequently, we should see more infrastructure and building projects announced, leading to a higher demand for building materials. According to the Ministry of Finance, the gross domestic product of the construction industry is projected to grow by 11.5% to RM59 billion in 2022. As one of the largest wholesalers and distributors of building materials in the country, Unitrade is poised to gain from this impending industry uptrend,” he added.

“Furthermore, we have recently consolidated our operations under a new industrial complex which houses our headquarters, warehouse, and factory facility. With that, we have managed to enhance our operational efficiency and reduce our carbon footprint. The new warehouse is measured at 281,000 square feet and is double the size of our previous one, giving us the ready capacity to increase our inventories to meet the upcoming surge in demand for building materials. Accordingly, we will deploy a portion of the IPO proceeds to boost our working capital, allowing us to swiftly ramp up our volume and capitalise on the opportunities,” he concluded.

Unitrade is scheduled to be listed on the ACE Market of Bursa Malaysia by May 2022, with M&A Securities as the Adviser, Sponsor, Underwriter, and Placement Agent for the IPO exercise.

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