Senheng New Retail IPO’s retail portion oversubscribed by 10.44 times

Senheng New Retail IPO’s retail portion oversubscribed by 10.44 times
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KUALA LUMPUR (Jan 12): Senheng New Retail Bhd, which is slated to list on Bursa Malaysia on Jan 25, said its initial public offering (IPO) shares offered to the Malaysian public were oversubscribed by 10.44 times.

In a statement on Wednesday (Jan 12), the consumer electrical and electronics retailer said it received 16,548 applications seeking 343.23 million for the 30 million shares offered.

Of this, the Bumiputera portion was oversubscribed by 5.22 times, with 6,869 applications seeking 93.31 million shares received.

As for the public portion, 9,679 applications for 249.92 million shares were received, giving an oversubscription rate of 15.66 times.

“The 22.5 million issue shares available for application by the eligible directors and employees of the group as well as other persons who have contributed to the success of the group have been fully subscribed,” the group said.

“The joint bookrunners have confirmed that the 149.5 million issue shares made available by way of private placement to institutional and selected investors have been fully placed out,” it added.

Senheng New Retail executive chairman Lim Kim Heng said the oversubscription indicates the public’s confidence of its over 30-year track record of building one of Malaysia’s best and most progressive retail brands, and its growth strategies that will transform the way consumers shop.

“Going forward, we are expanding our nationwide store network, enhancing in-store and online shopping experiences, as well as bringing a wider range of quality products to our customers.

“We are also upgrading our digital infrastructure and logistics capabilities to enhance our seamless retail experience in the digital era,” he added.

Lim said the group is targeting dividend payouts of at least 30% of net profit to shareholders.

Senheng’s IPO 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.

Of the proceeds raised, 60.0% or RM160.5 million 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 million will be used to strengthen the group’s back-end capacities and capabilities.

This includes developing a 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 million will be utilised to repay bank borrowings and defray listing expenses.

Mercury Securities Sdn Bhd is the principal adviser, managing underwriter, joint underwriter and joint bookrunner for the IPO exercise, while CIMB Investment Bank Bhd and AmInvestment Bank Bhd are the joint bookrunners and joint underwriters.

S Kanagaraju