Butterfield FB Opens Five Sen Below IPO Price On ACE Market Debut
KUALA LUMPUR, Sept 15 (Bernama) -- Butterfield FB Bhd opened five sen below its initial public offering (IPO) price on its debut on the ACE Market of Bursa Malaysia today.
The manufacturer of coffee and tea extract powder blends opened at 43 sen, representing a 10.4 per cent discount to its IPO price of 48 sen, with 5.27 million shares traded.
Executive director and chief executive officer Lee Mong Khai said share price movements could be influenced by various factors beyond the group’s control, adding that Butterfield FB will remain focused on its longer-term plans.
“Our priority now is to execute what we have listed in the prospectus. We will work very closely and dedicatedly to achieve what we have listed in the prospectus.
“I believe that valuation will follow execution, and delivery of results will be important in creating sustainable value for shareholders over time,” he told a press conference after the listing ceremony here today.
On its plans for the next two years, Lee said Butterfield FB will focus on fully utilising the capacity it has created for matcha, coffee extract and tea extract powder blends.
The group also intends to expand beyond its existing markets in Malaysia and Thailand, with other ASEAN countries and West Asia among the markets being considered.
On fluctuations in coffee and tea raw material prices, Lee said the group works with suppliers from different regions and uses medium-term contracts with customers and suppliers to minimise the impact of sudden movements in commodity prices.
“We want to deliver stable prices to our customers, regardless of what happens in the markets. We have gained this experience for more than 20 years. I think this is very important know-how for us on how to still be present in this market,” he said.
Butterfield FB’s subdued opening comes despite being oversubscribed 18.7 times.
Its IPO comprised a public issue of 150 million new shares. The corporate exercise raised RM72 million.
Of the proceeds, RM37.8 million has been earmarked for working capital, primarily for the purchase of coffee and tea extract powders and other supplies.
Another RM15.2 million will be allocated to expand the group’s headquarters in Bukit Minyak, Penang, including additional production and storage space and machinery acquisition.
The group has set aside RM13 million for strategic investments and mergers and acquisitions involving brand owners of instant coffee and tea premixes. The remaining RM6 million will be for listing expenses.
Butterfield FB also plans to establish a fourth manufacturing line, which will raise its total annual production capacity to 12,597 tonnes.It currently operates two manufacturing lines for coffee and tea extract powder blends, alongside a matcha powder line that commenced operations in February.
-- BERNAMA