99 SPEED Mart Retail Holdings Bhd, Malaysia’s largest home-grown mini-market chain retailer, has launched its initial public offering (IPO) prospectus today (Aug 150) in Shah Alam.
This is in conjunction with the company’s upcoming listing on Bursa Malaysia’s Main Market tentatively slated for Sept 9.
99 Speed Mart’s IPO is set to be the largest IPO in Malaysia since 2017 by market capitalisation and in terms of IPO deal size which features 14 cornerstone investors, including Malaysian government-linked investment companies (GLICs) and asset managers whose support covers 55% of the IPO deal size.
The group currently operates an extensive network of over 2,600 “99 Speedmart” mini-market stores nationwide.
The IPO exercise involves an offer for sale of 1,028.0 million existing shares which is expected to raise about RM660 mil through the public issue of 400 million new shares at RM1.65 apiece.
99 Speed Mart has earmarked more than half of its public issue or 58.9% of the proceeds for the expansion of its network of outlets; 15.2% for the establishment of new distribution centres; purchasing delivery trucks (8.3%) and upgrading of existing outlets (7.2%)
Another 6.8% has been allocated for the repayment of bank borrowings while the remaining proceeds shall be utilised for expenses related to its listing exercise.
Next phase of growth
Based on its enlarged issued share capital of 8.4 billion shares and IPO price of RM1.65/ share, 99 Speed Mart’s expected market capitalisation is RM13.9 bil, thus potentially making it Malaysia’s largest IPO since 2017.
“Over the years, we have established a strong foundation with our extensive network of mini-markets, serving approximately 1.1 million customers daily nationwide based on the sales transactions recorded in the financial year ended 2023,” commented 99 Speed Mart’s founder and CEO Lee Thiam Wah.
“This IPO will provide us with the necessary funds to further expand our outreach and enhance our operations.”
Added Lee: “We are excited to embark on the next phase of our corporate journey by further strengthening our brand recognition and our tagline of “Near n’ Save” which emphasises convenience and easy access for our customers while saving them time and money.”
99 Speed Mart has a dividend policy targetting a dividend payout ratio of about 50.0% of its net profit attributable to its shareholders.
CIMB Investment Bank Bhd is the principal adviser, sole bookrunner, sole managing underwriter and joint underwriter for the IPO exercise while Affin Hwang Investment Bank Bhd and RHB Investment Bank Bhd are the other joint underwriters for the IPO exercise.
The public issue portion of 99 Speed Mart’s IPO will be made available for subscription from today (Aug 15) and application will close at 5pm on Aug 23. – Aug 15, 2024
