Sorento Capital Bhd is planning to raise RM57.4 million through its upcoming initial public offering (IPO) exercise and listing on the ACE Market of Bursa Malaysia Securities Bhd (Bursa Securities).

Sorento Capital Managing Director Loo Chai Lai said the fund raised will be expansion purposes, with RM31.4 million (54.7%) allocated for working capital to purchase inventories. RM6 million (10.5%) will support branding and promotional marketing efforts, while another RM6 million (10.5%) will go towards expanding the dealer network and enhancing distribution reach.

"Some RM9 million (15.6%) will be used for the repayment of bank borrowings while the remaining RM5 million (8.7%) will cover listing expenses," Loo said in a statement.

He added that the amount will be raised via the public issuance of 155 million new ordinary shares (Issue Shares) and an offer for sale of 74 million existing shares, representing 18% and 8.6% respectively of the company's enlarged issued share capital of 860 million ordinary shares upon its listing.

"Of the 155 million Issue Shares, 43 million will be made available to the Malaysian public via balloting, while 16 million are allocated for eligible directors, employees and persons who contributed to the success of the group (Pink Form Allocations).

"The remaining 96 million Issue Shares will be offered through private placements to selected Bumiputera investors approved by the Investment, Trade and Industry Ministry," Loo said.

Alliance Islamic Bank Bhd is the principal advisor, sponsor, underwriter and placement agent for the IPO exercise.

Following the prospectus launch, applications for the public issue are open from today and will close on Oct 15, 2024, at 5pm. The group is scheduled to be listed on the ACE Market on Oct 28, 2024.

Based on the IPO price of RM0.37 per share and the enlarged issued share capital of 860 million ordinary shares, Sorento Capital's market capitalisation upon listing will be approximately RM318.2 million.

Soreno Capital is primarily engaged in the marketing, distribution and sales of bathroom and kitchen sanitary wares.

The company's products are primarily sold through an extensive network of 664 dealers across Malaysia, as well as to project customers including property developers, trading companies, contractors and interior designers.m RM7.8 million to RM24.4 million during the same period, reflecting a 3-year CAGR of 46.3%.

Alliance Islamic Bank Berhad is the Principal Adviser, Sponsor, Underwriter, and Placement Agent for the IPO exercise. Following the prospectus launch, applications for the public issue are open from today and will close on October 15 2024 at 5.00 pm. The Group is scheduled to be listed on the ACE Market of Bursa Securities on October 28 2024.