(From left) Saliran Group Bhd chief operation officer Gavin Lim Bak Teik, Malacca Securities corporate finance vice president Tan Sin Jiang, corporate finance co-head Jason Chan, managing director Lim Chia Wei, Saliran Group managing director Dennis Liaw Choon Wei, chairperson Datuk Josephine Low Suet Moi, executive director William Chan Koon Wai and chief financial officer Francis Yong Wai Kin at the prospectus launch of Saliran Group in conjunction with its listing on the ACE Market.
KUALA LUMPUR: ACE Market-bound Saliran Group Bhd aims to raise RM21.71mil via an initial public offering (IPO) to fund its expansion plans across South-East Asia.
Its shares are priced at 27 sen each and the group will issue 80.4 million new shares for the exercise, with its listing slated for March 13, 2025.
Saliran is principally involved in the supplying and distributing of pipes, fittings and flanges as well as related parts and accessories, and steel products catered to the oil and gas industry.
Managing director Dennis Liaw Choon Wei said Saliran would establish a new sales office in Indonesia with the cash raised.
“The Indonesian oil and gas industry is booming.
“By opening a sales office in Indonesia, it will allow us to experience more growth and opportunities,” he told reporters after the launch of Saliran’s prospectus here yesterday.
He added the focus on South-East Asia was due to the high potential and demand for its product and services in the region.
The group will allocate RM1.2mil of the proposed proceeds for the establishment of a new sales office in Indonesia.
The amount will be utilised to rent a 1,000 sq ft office unit in Jakarta for a tenure of 36 months as well as hiring workforce and one-off equipment purchases.
A total of RM1.44mil has been allocated for the purchase of new machinery and five delivery trucks.
Some RM8.37mil of the proceeds would go to fund general working capital requirements which will enhance the groups’ stock turnover and meet customer demand, said Liaw.
The remainder has been allocated to repayment of bank borrowings at RM7mil and estimated listing expenses at RM3.7mil.
Liaw said Saliran’s business would remain unaffected by US tariffs on steel as its operations are mainly focused in the South-East Asian market.
Of the 80.4 million new shares, 47.86 million shares have been made available to selected bumiputra investors approved by the Ministry of Investment, Trade and Industry (Miti), while 19.15 million shares are made available for the public.
The remaining shares have been put aside for eligible directors and employees of Saliran and its subsidiaries, as well as via private placement to selected investors at 7.66 million and 5.73 million shares respectively.
The exercise will also see an offer for sale of 38.29 million existing shares by existing shareholders.
Upon completion of the IPO exercise, Maju Alliance – which is owned by Liaw and Saliran’s executive director William Chan – will be the substantial shareholder of Saliran with a 69% direct stake.
As of Aug 31, 2024, Saliran had recorded a net profit of RM9.29mil on a revenue of RM217.18mil.
Saliran posted net profit of RM10.15mil and revenue of RM243.16mil for the financial year ended Dec 31, 2023 (FY23).
Upon listing, Saliran is expected to have a market capitalisation of RM103.38mil at a valuation of 10.42 times its price-to-earnings multiple for FY23.
