99 Speed Mart to raise RM2.36bil in largest IPO in 7 years
Published on: Thursday, August 15, 2024
By: FMT Business
.jpg "99 Speed Mart to raise RM2.36bil in largest IPO in 7 years")
99 Speed Mart Retail Holdings’s IPO is expected to be the largest fundraising on Bursa since July 2017, when Lotte Chemical Titan Holding raised RM3.77 billion.
PETALING JAYA: Minimarket retail chain 99 Speed Mart Retail Holdings Bhd has launched Malaysia’s largest initial public offering (IPO) in seven years, aiming to raise RM2.36 billion through its listing on Bursa Malaysia’s Main Market on Sept 9, 2024.
“Priced at RM1.65 per share, the IPO is now open for orders from retail and institutional investors. The retail offering will close on Aug 23, and the institutional tranche will end on Aug 27," it said in the prospectus.
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If completed successfully, the IPO would be the largest fundraising on Bursa since July 2017, when Lotte Chemical Titan Holding Bhd raised RM3.77 billion.
It said 99 Speed Mart’s IPO involves an offer for sale of 1.03 billion existing shares and a public issue of 400 million new shares.
The institutional tranche comprises 1.22 billion shares through bookbuilding, while 210 million shares have been allocated to retail investors.
Cornerstone investors have agreed to take up 786 million shares, more than half of the IPO shares, and each will hold less than 5% stake in the company.
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The 14 cornerstone investors include state investment companies Employees Provident Fund (EPF) and Social Security Organisation (Socso), fund managers AHAM Asset Management Bhd and Areca Capital, and insurers AIA and Great Eastern Life Assurance.
Alternate director Albert Lew Yan Zhong said 58.9%, or RM389 million, will be used to expand its outlets and RM100 million, or 15.2%, to set up a new distribution centre.
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“We will set aside 8.3% (RM55 million) of the total proceeds to purchase delivery trucks and RM47.6 million to upgrade existing outlets and to procure energy-efficient equipment.
"Lastly, RM45 million will be used to pare down the group’s existing borrowings, with the remaining RM23.4 million to cover listing expenses," he said at the launch of the company’s prospectus.
Meanwhile, the minimarket retail chain said the offer for sale is expected to generate approximately RM1.7 billion, which will go entirely to the selling shareholders, Lee Thiam Wah, the founder and CEO of 99 Speed Mart, and his wife, Ng Lee Yieng.
“CIMB Investment Bank serves as the principal adviser, sole bookrunner, sole managing underwriter, and joint underwriter for the IPO. Affin Hwang Investment Bank and RHB Investment Bank are also joint underwriters," it added.
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