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https://scmp.com/business/companies/article/3146604/top-glove-worlds-biggest-rubber-glove-maker-reapply-hong-kong Companies
Top Glove, world’s biggest rubber glove maker, to reapply for Hong Kong listing after US ban over forced labour derailed previous attempt
- Malaysian company says it will renew its application for a dual primary listing ‘as soon as practicable’
- Originally targeting US$1.9 billion, the Malaysian firm said in June it would delay its Hong Kong stock sale after the US ban on its imported products
A worker inspects disposable gloves at the Top Glove factory in Shah Alam on the outskirts of Kuala Lumpur. Photo: AFP
The world’s biggest maker of rubber gloves said it will renew its application to list on the Hong Kong stock exchange after a US ban on its products forced it to delay its initial attempt to raise as much as US$1.9 billion.
Top Glove said in a filing to Bursa Malaysia on Thursday – the same day its application lapsed – that it will still push ahead with the dual primary listing in Hong Kong, but did not say when it would resubmit the application.
The company had said previously the listing would broaden its investor base, enabling it to reach new institutional investors including Chinese funds and wealth management investors.
Its plans for a Hong Kong flotation were derailed when the US banned imports of its disposable gloves, accusing it of forced labour practices.
“The company is still pursuing the proposed dual primary listing and intends to renew the Hong Kong Exchanges and Clearing (HKEX) listing application as soon as practicable,” it said in the filing to Bursa Malaysia on Thursday.
In February the Malaysian company proposed issuing 1.49 billion new shares to raise up to HK$14.95 billion (US$1.9 billion), although the issue price had not been at that time.
As well as the Malaysian bourse, Top Glove’s shares are also trading on the Singapore Exchange.
A successful listing in Hong Kong would be good for HKEX, which has been hoping to drum up its listing business from issuers outside China. In the first half of the year, 46 IPOs raised over HK$200 billion in Hong Kong, with Chinese issuers accounting for 97.5 per cent of the proceeds and 80 per cent of the deals.
Top Glove said in June that because of a US ban on imports of its gloves it would delay its share sale plan in Hong Kong “by a few months”, according to a Bloomberg report that cited chairman Lim Wee Chai.
Top Glove became mired in allegations of forced labour last year, as US customs officials placed a detention order on imports of its products. The company subsequently disclosed in July 2020 that the detention order “may be related to foreign labour issues”, citing recruitment fees paid by migrant workers to employment agents. It also said it had reimbursed its migrant workers, at an estimated cost of up to 50 million ringgit (US$11.9 million)
It is not clear if Top Glove has resolved the US import freeze. The company said in May that it was working with US Customs and Border Protection towards a resolution, and that it had remedied certain forced labour “indicators” set out by the International Labour Organization (ILO). According to the ILO, such indicators are intended to help criminal law enforcement officials, among others, to identify people who may be trapped in a forced labour situation.
Top Glove said in its previous filing that it planned to use the net proceeds from a Hong Kong IPO to expand its production capacity, as well as its research and development facilities and its environmental, social and governance (ESG) initiatives.