Top Glove Bhd : Malaysia's Top Glove halves HK listing size to $1 billion, cites ownership dilution concerns

HONG KONG (Reuters) - Malaysia's Top Glove Corp Bhd, the world's largest medical gloves maker, has slashed the size of its Hong Kong listing by nearly half to about $1 billion, citing shareholder dilution concerns.

In a statement to the Malaysian bourse late on Thursday, Top Glove said it now plans to issue 793.5 million shares in the deal, down from the 1.495 billion flagged when it published its initial documents to the Hong Kong Stock Exchange in February.

That will bring the size down to $889.11 million from the earlier planned $1.9 billion. An overallotment option exists which, if exercised, could take the proposed deal value to $1.02 billion.

"The revision to the number of new Top Glove shares ... takes into consideration the best interest of the existing shareholders of the company by minimising dilution to existing shareholders' respective shareholdings," the company said.

Chairman Lim Wee Chai, with 26.2%, and Firstway United Corp, with 6.8%, are the top two shareholders of Top Glove, according to Refinitiv Eikon data.

Top Glove hopes to list in Hong Kong by June and its application is currently being vetted by the city's stock exchange, two sources with direct knowledge of the matter told Reuters.

Top Glove did not immediately respond to a request for comment. The sources couldn't be named because the information had not yet been made public.

The listing move comes even as Top Glove is facing allegations of labour abuses in the production of its rubber glove products.

U.S. Customs said late last month it had found forced labour practices in Top Glove's production of disposable gloves, and directed its ports to seize goods from the manufacturer.

Top Glove has said that its U.S. counsels were liaising with U.S. Customs and Border Protection representatives to obtain more clarity and information on the matter. The company has said in the past that it has taken extensive rectification actions to improve its labour practices.

Still, those concerns have contributed to pushing Top Glove's Malaysia-listed shares down more than 6% this year, after they surged nearly four-fold in 2020 due to soaring demand for gloves from the COVID-19 pandemic. The shares gained 1.6% on Friday.

Top Glove said on Thursday 60% of the funds raised in the Hong Kong deal would be spent on expanding its production capacity, among other uses.

($1 = 7.7606 Hong Kong dollars)

(Reporting by Scott Murdoch in Hong Kong; Editing by Muralikumar Anantharaman)

By Scott Murdoch