KUCHING: Supreme Consolidated Resources Bhd will undertake a proposed issuance of 70 million new ordinary shares that is expected to raise RM17.5 million to mainly fund the expansion of the company’s warehousing facility. The indicative price for the proposed share issuance is 25sen per share.
Supreme has proposed to withdraw its listing from the LEAP Market to ACE Market of Bursa Securities. The proposed issuance of new shares is to ensure that the company is in compliance with Rule 3.10 of the ACE Market Listing Requirements which states that a company is required to meet a public shareholding spread of at least 25 per cent of the total number of listed shares (excluding treasury shares) to be in the hands of a minimum number of 200 public shareholders holding not less than 100 shares each, according to Supreme chairman Datuk Ibrahim Baki.
Out of the 700,000 new shares to be issued, 53.75 million shares will be made available by way of private placement to Bumiputera investors approved by the Ministry of Investment, Trade and Industry (MITI), he said in a circular to shareholders on the proposed withdrawal of the company’s listing on the LEAP Market, proposed bonus issue of 240 million new ordinary shares on the basis of two bonus shares for one existing share and proposed listing on the ACE Market.
Another 10.75 million new shares will be allocated to eligible directors and employees and persons who have contributed to the group’s success and the balance 5.5 million new shares for subscription of the Malaysian public.
Before the issuance of the 70 million new shares, Supreme will undertake a proposed bonus issue of 240 million new ordinary shares.
The proposed bonus issue is a prelisting exercise to the proposed listing of Supreme on ACE Market. Supreme will convene an extraordinary general meeting (EGM) on Jan 31, 2024 for the shareholders to vote on the proposals. Subject to all the approvals being obtained and barring any unforeseen circumstances, Ibrahim expects Supreme’s proposed transfer of listing to the ACE Market to be completed by the fourth quarter of 2024.
Ibrahim said if RM17.5 million could be raised from the issuance of new shares, Supreme will set aside RM11 million for the expansion of warehousing facility, RM4 million for working capital and RM2.5 million to pay for the estimated expenses relating to the proposed transfer of listing. “We aim to construct new warehousing and cold storage facility that will serve as a main distribution for the group and is expected to cater for the expansion of the group’s products.
“The current warehousing and cold storage facilities are operating at almost full capacity, resulting in the need to rent additional storage space to store the products which increases our expenses and reduces operational efficiency.
“The new warehousing facilities will include a new warehousing area, cold storage facilities (such as freezer and chiller room to store frozen and chilled food), office, loading and unloading bay as well as a fully-equipped kitchen which is to be used for marketing activities such as cooking demonstrations to our customers.
The built-up area if the warehousing facilities are approximately 2,000 square metres,” he added in a circular to shareholders. Ibrahim said the total cost of the construction of the new warehousing facilities is estimated at RM13 million. The group’s current warehousing facilities at Demak Laut Industrial Park, which was completed in October 2020 for RM13.14 million, comprises a three-storey office cum warehouse with built-up area of approximately 3,266.2 square metres.
According to Ibrahim, the group plans to expand its product range via securing new agency rights as part of its efforts to introduce new products that are in line with customers’ needs. “The expansion will involve securing rights for local and overseas products that complement the current product offerings. The product range expansion will also include the sourcing and agency rights for alternative products, such as blended butter, which are priced lower than butter, to provide customers with additional choices with different pricing.
“One successful example of the product range expansion includes securing the rights to distribute dry F&B products in Sri Aman and its surrounding areas, which increases the type of F&B products that we currently offer,” he added. He said by expanding the product range, the group aims to attract new consumers and generate more revenue. Supreme also plans to expand its distribution network in selected districts in Sarawak for improved distribution efficiency and at the same time, reduce dependency on other distributors.
“The group’s warehousing and distribution facilities are currently located in Kuching and Miri.
The group is currently exploring the possibilities of expanding its distribution network to Sibu and Bintulu, two districts that are located in the middle of the state of Sarawak.
The expansion of the distribution network will be achieved via acquisition of suitable distributors in the two identified districts or by establishing a distribution network in the said districts. “Our board (of directors) is of the view that the growth prospects of the F&B distribution business are promising, supported by the overall growth of retail and wholesale F&B trade in Sarawak,” added Ibrahim.
He said the group has also incorporated a new subsidiary — Supreme Dairy Ventures Sdn Bhd — with the intention to undertake the export trading of the group’s dairy products. The group, he added, is currently looking at venturing into the distribution of fresh milk products using its own brand.
