Friday 21 Jun 2024
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KUALA LUMPUR (June 20): The initial public offering of SkyWorld Development Bhd, which will raise a total RM320 million for the main-market bound property developer, is going to be the third-largest listing exercise on Bursa Malaysia this year.

At a total RM320 million in funds that will be raised, SkyWorld’s IPO will only be behind that of DXN Holdings Bhd, which raised a total RM708.83 million, and Radium Development Bhd’s RM434 million. Both groups were listed in May.

Combined, the amount raised by the two groups made up 43% of the total amount raised through public listings on Bursa so far this year. With SkyWorld being listed, the top three groups raked in more than RM1.4 billion, over 55% the amount raised so far this year through listings.

SkyWorld Development’s IPO, which is scheduled to debut on the Main Market of Bursa Malaysia on July 10 this year, entails a public issuance of 208 million new shares and an offer for sale of up to 192 million existing shares.

With an issue price of 80 sen per share, it will raise RM320 million for the company and its offerors.

Of the RM320 million, RM166.4 million will be raised from the issuance of new shares, with the remaining RM153.6 million from the offer for sale of existing shares by both its founder and non-independent executive chairman Datuk Seri Ng Thien Phing and non-independent executive director Datuk Lam Soo Keong @ Low Soo Keong, according to the company’s prospectus released on Tuesday (June 20).

Prior to the IPO, Ng owned 549.18 million shares (69.34%) in SkyWorld Development, while Lam owned 158.36 million shares (19.99%).

Post-IPO and assuming full conversion of the irredeemable convertible preference shares (ICPS), Ng’s stake will be diluted to 46.23%, while Lam’s will be reduced to 11.74%.

As a result, Ng is expected to cash in RM107.52 million based on the number of shares offered for sale by him of 134.4 million shares, while Lam will receive RM46.08 million for the 57.60 million shares offered for sale.

Based on the enlarged issued share of one billion shares and an IPO price of 80 sen per share, the company is expected to have a market capitalisation of RM800 million.

The company targeted a dividend payout of 20% based on its profit after tax attributable to owners.

“We believe our IPO offering has the potential to enhance our business operations, create value for our shareholders and benefit our long term prospects,” said Ng.

Looking ahead, Ng said the company anticipates the property market to grow in an upward trajectory after the challenges over the last two years.

Of the total proceeds raised from the issuance of new shares, SkyWorld has earmarked RM100 million for the acquisition of land for development.

Another RM35 million has been budgeted for working capital for project development and RM20 million for the repayment of bank borrowings, with the remaining RM11.2 million (6.7%) allocated for IPO related expenses.

Kenanga Investment Bank Bhd is the principal adviser, underwriter and placement agent for the offering, while Newfields Advisors Sdn Bhd is the financial adviser.

Meanwhile, DXN raised RM652.87 million through the public issuance of 160 million new shares and an offer for sale of 772.68 million of existing shares, at 70 sen per share. It was the second stint for DXN as a listed company on Bursa Malaysia, having been delisted back in December 2011.

However, the counter has failed to live up to its IPO price, having lost 7.14% so far since listing. It was trading at 65 sen per share last Tuesday.

DXN is principally involved in sales of health-oriented and wellness consumer products through its direct-selling network or sales branches.

Property developer Radium Development raised RM434 million from its listing exercise — all from its public issuance of 868 million new shares based on an IPO price of 50 sen per share. However, the counter has suffered so far since its listing, trading at 26% lower than its IPO price at 37 sen as of last Tuesday.

Edited ByKamarul Azhar Azmi
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