KUALA LUMPUR (Dec 10): The first food and beverage (F&B) special purpose acquisition company (SPAC) listed on Bursa Malaysia, Red Sena Bhd, failed to shine on its debut and opened 21% or 10.5 sen lower than its offer price of 50 sen.
However, its warrants, which were issued free with the subscription of the shares, jumped 1,900% or 9.5 sen to 10 sen at the opening.
The first non-oil and gas SPAC's warrants and its mother shares were the top and second most-actively traded counters at the opening bell, with 17 million and 6.69 million shares traded respectively.
Although the mother shares were traded at a 10.5 sen discount from its initial public offering (IPO) price, if the warrants were taken into account, those who bought the shares at the IPO price would make a loss of 1 sen on their investment.
At 10.28am, the shares and the warrants were at 38.5 sen and 8 sen respectively.
Despite the unexciting opening, the SPAC's chief executive officer Joseph Tan Eng Guan is confident the share will perform better going forward because of its F&B venture and management team.
Tan was the former chief financial officer of Fraser & Neave Holdings Bhd.
Asked if the lacklustre performance was due to overpricing, Tan opined that the share value is backed up by cash in trust of 46 sen.
"We can't draw conclusion on the debut, we have confidence based on our cornerstone investors," he added.
He was speaking to reporters after the listing ceremony.
The IPO, priced at 50 sen per share with one free warrant for each share subscribed, also includes a private placement of 720 million shares.
The total funds raised was RM400 million; 92% of the total will be placed in a cash trust account to acquire operating companies or assets in the branded packaged F&B business.
(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)