From left: Sorento Capital Bhd executive director Lee Chee Keong, Sorento Capital executive director Jayden Loo Jing Kai, Sorento Capital managing director Loo Chai Lai, Sorento Capital independent non-executive chairman Ahmad Zakie Ahmad Shariff, Alliance Islamic Bank Bhd chief executive officer Rizal IL-Ehzan Fadil Azim and Alliance Islamic Bank senior vice president - coverage & origination Lim Shueh Li.
KUALA LUMPUR: Bathroom and kitchen sanitary ware solutions provider Sorento Capital Bhd aims to raise RM57.4mil from its initial public offering (IPO) as it makes its way to list on the ACE Market of Bursa Malaysia on Oct 28, 2024.
The IPO exercise consists of the issuance of 229 million ordinary shares at a price of 37 sen per share. Upon listing, Sorento is expected to have a market capitalisation of RM318.2mil.
Executive director Jayden Loo Jing Kai said the proceeds from the IPO will enable Sorento to strengthen support for its dealers via subsidies.
Planned subsidies include those for new or existing dealers that will sell Sorento’s in-house brands exclusively at their stores, enhancing and upgrading selected dealers’ retail stores, as well as subsidies to operate Sorento concept stores which will showcase its higher-end product range exclusively.
“We also plan to recruit around 200 new dealers nationwide over the next three years,” he said in his opening remarks at the launch of Sorento’s prospectus here yesterday.
Hence, the group will be allocating about 10.5% of its proceeds, equivalent to RM6mil, for the expansion of its dealer network.
When asked whether there were certain criteria when selecting dealers, Loo said Sorento was not selective in expanding its network.
“We want to increase our presence throughout the country. The criteria for dealer recruitment will be based on the market size of specific regions and we will customise our marketing strategies accordingly,” he said. As of today, Sorento has a network of over 600 dealers across Malaysia.
The group also has plans to increase its revenue from project-based sales by targeting building segments such as affordable housing, hotels and offices as an initiative to further fuel growth.
Loo stated that by increasing project-based sales, it will provide the group with a much larger volume order and amplify its brand visibility within property projects.
Following that, Sorento will be utilising RM31.35mil from the proceeds to fund the purchase of product inventory to support sales of both dealers and projects.
“The amount was actually decided based on the growth that we currently have in our orders in terms of projects, deals and expansion. Based on the deals that we have, we need to cater to the demand from our dealers to meet the expectations from the market,” he said.
Additionally, a total of RM6mil will be allocated towards branding and promotional marketing – which Loo said will aid Sorento in enhancing brand recognition and expand the group’s market reach in the industry.
The remainder of the proceeds will be allocated for repayment of bank borrowings and estimated listing expenses at RM9mil and RM5mil, respectively. Applications for the public issue portion of the IPO will close on Oct 15, 2024 at 5pm.
