KUALA LUMPUR: Convenience store chain operator 99 Speed Mart Retail Holdings Bhd (Speed Mart) has launched Malaysia's biggest initial public offering (IPO) in seven years, which will raise up to RM2.36 billion.
Speed Mart's listing on Bursa Malaysia's Main Market will be the biggest since Lotte Chemical Titan Holding Bhd grossed RM3.77 billion in July 2017.
The offering will also be Southeast Asia's biggest IPO in over one year since Amman Mineral Internasional's listing in Indonesia in July last year, according to the LSEG data quoted by Reuters recently.
Of the RM2.36 billion to be raised, RM1.7 billion will go to Speed Mart's selling shareholders Lee Thiam Wah, who is also its chief executive officer, and his wife Ng Lee Yieng.
The IPO entails an offer for sale of 1.03 billion existing shares and a public issue of 400 million new shares at RM1.65 each. The public issue will raise RM660 million.
Based on the enlarged issued share capital of 8.4 billion 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 size.
Speed Mart 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.
A total of 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.
Lee, its founder and CEO, said Speed Mart had established a strong foundation with its extensive network of mini-markets, serving about 1.1 million customers daily 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 the IPO.
The company operates the 99 Speedmart mini-market stores, with over 2,600 outlets nationwide.
It 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 THursday and application will close at 5pm on August 23.