MALAYSIAN-controlled but Hong Kong-listed Infinity Logistics and Transport Ventures Ltd aims to be the first company to come to the local equity market via a dual listing.
The company’s managing director and major owner Datuk Chan Kong Yew points out that while there have been Malaysian listed companies that sought a dual listing in Hong Kong, the reverse has not happened before.
“At this moment, there is no Hong Kong-listed company that has come back to dual-list in Malaysia. But there have been requests to do so the other way around,” Chan explains.
Chan, along with Infinity Logistics’ executive director Ethan Kwan, are the major owners of the company.
Infinity Logistics is an integrated fourth party logistics and lead logistics provider that also provides integrated freight forwarding, flexitank solutions, railroad transportation and logistics centre solutions.
“We have approached Bursa Malaysia to ask them if we can be dual listed in Malaysia. We would like to tap into the local capital market to fund our next phase of growth.
“The money raised from the local capital market would be invested in Malaysia,” Chan tells StarBizWeek.
“While the liquidity in Hong Kong is better, the liquidity in Malaysia is not small either. The exercise will give investors more options to invest into our company, which is a growing global commodity logistics player,” he adds.
“Access World, being a global commodity logistics leader, will not just benefit Infinity L&T but Malaysia as well by producing opportunities for not just the industry but also the entire logistics supply chain economy in the country.“With this acquisition, Infinity L&T will continue to create value and put Malaysia on the global map as a leader in logistics and transportation, ” said Infinity Logistics chairman Tan Sri Nelson Tan
Chan says he hopes that the dual-listing will become a reality in “a year or two.”
Infinity Logistics & Transport Sdn Bhd (ILT) is an indirect wholly owned subsidiary of the Hong Kong-listed company.
ILT, which has its main operations in Malaysia, was founded in 2003 and was subsequently listed in Hong Kong on Jan 21, 2020.
It was listed then at a reference price of 31 HK cents (16.63 sen) per share, and its shares last traded at HK$1.73 (93 sen) per share.
“We listed in Hong Kong because we wanted to be known as a regional logistics company.
“We wanted the company to be known in the North Asian area – Taiwan, South Korea and China,” Chan says.
It had also wanted to tap on business opportunities arising from the Belt and Road Initiative by China.
“There would be opportunities from companies that are going to China and vice versa.
“We were then looking at opportunities for mergers and acquisition (M&A) and by chance we found the opportunity to acquire Access World,” Chan says.
Access World was formerly London-listed Glencore Plc’s warehousing and logistics business and had recently been acquired by ILT for US$177mil (RM741mil).
When Glencore first acquired Access World in 2010, it was known then as Pacorini Metals.
For ILT today, the acquisition of Access World would see it immediately grow a lot bigger since it is acquiring a larger company.
“This is not a reverse takeover but an acquisition of a much larger company by us. Our revenue is about five and a half times lower than the (acquired) company,” Chan says.
Some US$100mil (RM418mil) will be funded through borrowings from a Malaysian bank, while the remainder US$77mil (RM322mil) will be funded by shareholders of the ILT group.
“We will either do this through a placement or a rights issuance. There are interested companies and parties that are talking to us to possibly take up stakes in our company.
“We have even attracted queries from blue chip companies which can be a strategic fit for us. Many of these are investors in ports and logistics centres,” Chan says.
“They either enquired through the banks or came directly to us,” he says, adding that he and Kwan who are now the majority shareholders with a close to 70% stake, did not mind a dilution in their equity stakes.
Chan also says that the company is looking for further M&A opportunities moving forward to grow even larger.
“We can digest the acquisition of Access World. There are some M&A opportunities in the pipeline as the shareholders of ILT are very hungry. We are looking at a few strategic assets in Malaysia and elsewhere to further complement our present company set up,” Chan says.
Meanwhile, Chan says that ILT is also talking with the Malaysian government with the hopes of basing its global commodity logistics hub here in Malaysia.
“We would like to handle the logistics for this and also hope for Malaysia to be the regional distribution center (RDC). We would like for Port Klang, the Port of Tanjung Pelepas, Johor Port and Penang to be a sizeable cargo transhipment hub in commodities, logistics and RDC,” Chan says.
Its acquisition of Access World can help achieve this aspiration since Access World operates a global network of port and warehouse facilities, positioned in the main strategic locations of the key commodities it handles, he adds.
Access World was founded in Italy back in 1933 and is now a global integrated logistics service provider with operations in 25 countries in Asia, Africa, Europe, the Middle East, North America and South America with its headquarters in Switzerland.
“With this acquisition, it helps to put Malaysia on the global map – not just in commodity logistics but in the areas of the logistics and the transport industry as a whole.
“It can help bring business opportunities into the country. It can also help create value in the commodity supply chain,” executive director Yap Sheng Feng says.
Elaborating further, Yap notes that this is even more relevant for Malaysia since the country is a producer of several commodities including palm oil, energy, aluminum, tin and gold.
“This is a good foundation to build further on this whole commodities ecosystem,” Yap notes.