KUALA LUMPUR: 99 Speed Mart Retail Holdings Bhd (99 Holdings) which plans to list on the Main Market of Bursa Malaysia Securities on September 9, 2024 will be the biggest initial public offering the country has seen in seven years.
The IPO exercise entails an offer for sale of 1.028 billion existing ordinary shares, and a public issue of 400 million new ordinary shares at RM1.65 each per share, to raise RM660 million.
Based on the enlarged issued share capital of 8.4 million shares and IPO price of RM1.65 per share, the expected market capitalisation would be RM13.9 billion.
The IPO is backed by 14 cornerstone investors including Malaysian government-linked investment companies and asset managers, whose support covers 55 per cent of the IPO deal size.
99 Holdings has earmarked 58.9 per cent of the RM660 million proceeds from the public issue for the expansion of its network of outlets and 15.2 per cent for the establishment of new distribution centres.
8.3 per cent and 7.2 per cent were budgeted for purchasing delivery trucks and upgrading existing outlets respectively. Another 6.8 per cent was allocated for the repayment of bank borrowings, while the remaining proceeds shall be used for expenses related to the listing.
99 Holdings' founder and chief executive officer Lee Thiam Wah said the company have established a strong foundation with its extensive network of mini-markets, serving about 1.1 million customers daily nationwide based on the sales transactions recorded in the financial year ended 2023.
"This IPO will provide us with the necessary funds to further expand our outreach and enhance our operations."We are excited to embark on the next phase of our corporate journey, further strengthening ourbrand recognition and our tagline of "Near n' Save", emphasising convenience and easy access for our customers, saving them time and money," he said.
CIMB Investment Bank Bhd is the principal adviser, sole bookrunner, sole managing underwriter, and joint underwriter for this IPO exercise, while Affin Hwang Investment Bank Bhd and RHB Investment Bank Bhd are the other joint underwriters for this IPO exercise.
The company operates the 99 Speedmart mini-market stores, with over 2,600 outlets nationwide.
99 Holdings has a dividend policy which targets a dividend payout ratio of approximately 50.0 per cent of its profit after taxation attributable to its shareholders.
The public issue portion of the IPO will be made available for subscription from today and application will close at 5pm on August 23.