MALAYSIA’S leading consumer electrical & electronic (E&E) retailer Senheng New Retail Bhd, which in en route to a Main Market listing on Bursa Malaysia, is on course to raise proceeds of RM267.5 mil from its initial public offering (IPO) exercise aimed at funding the company’s next transformation phase.
The exercise entails the public issue of 250 million new shares and an offer-for-sale of 139.5 million existing shares at an issue price of RM1.07 per share. Based on an issue price of RM1.07 per share, Senheng will achieve a market capitalisation of RM1.6 bil upon listing.
Of the proceeds to be raised from the public issue, 60% or RM160.5 mil will go towards setting up new stores as well as upgrading existing stores into bigger, enhanced concept stores. The group aims to upgrade or set up 61 new and existing stores from 2022 to 2024 to elevate the shopping experience of its customers.
Another 19.3% or RM51.7 mil will be used to strengthen the group’s back-end capacities and capabilities.
This includes developing new brand distribution business, expanding and upgrading the warehouse and logistics network, and boosting the group’s digital infrastructure. The remaining 20.7% or RM55.3 mil will be utilised to repay bank borrowings and defray listing expenses.
“Today, our customers are increasingly purchasing from our online platforms due to the additional convenience, while our physical retail stores serve as experiential centres for customers to get up close with the brands and products of their liking,” commented Senheng’s executive chairman Lim Kim Heng.
“We aim to be the territory champion within every 5km radius of our stores with the largest floor space and variety of products.”
Moving forward, Senheng aspires to enhance its in-store shopping experiences while upgrading its operational capabilities to continue providing the best of seamless retail experiences to all its customers.
In 2015, the company embarked on multiple transformations since inception, including its digital transformation to improve operational efficiencies and customer experiences.
The group’s latest transition into the seamless new retail model in 2017 also integrated its physical stores and back-end functions to its online platforms and Senheng App.
Senheng’s commitment to continuous innovation has contributed to its success with annual revenue consistently exceeding RM1 bil from the financial year ended (FYE) Dec 31, 2018 to FYE2020.
Despite store operation disruptions due to COVID-19-induced lockdowns, Senheng achieved RM1.3 bil in revenue in FYE2020, growing 13.1% from RM1.1 bil in the previous corresponding year (FYE2019).
Of the 250 million new shares, 149.5 million shares will be placed out to institutional and selected investors with 48 million shares to be placed out to Bumiputera investors approved by the Ministry of International Trade and Industry (MITI).
Another 22.5 million shares will be made available for application by eligible directors, employees, and persons who have contributed to the group’s success while the remaining 30 million new shares will be made available for application by the Malaysian public via balloting.
Another 139.5 million offer-for-sale shares will be placed out to Bumiputera investors approved by MITI.
Applications for Senheng’s IPO are open today (Dec 29) until Jan 10, 2022. Senheng’s listing is tentatively scheduled for Jan 25. – Dec 29, 2021
