KUALA LUMPUR (April 15): Eco-Shop Marketing Bhd said on Tuesday it will soon launch its initial public offering (IPO) on the Main Market after signing an underwriting agreement with Maybank Investment Bank.
The dollar store retailer plans to release its prospectus “in the coming weeks”, Eco-Shop CEO Jessica Ng said in a statement. Under the agreement, Maybank will underwrite the retail portion of the IPO.
“The IPO will not only enhance our financial position but also strengthen our ability to capture the vast opportunities in Malaysia’s thriving value retail market,” Ng said.
Eco-Shop operates 358 stores nationwide, selling over 10,000 third-party and house-brand products ranging from toys to toothpaste. Most of its products are priced at RM2.40 while the rest are below RM20.
Backed by Creador Capital Group, the private equity firm that also invested in Mr DIY Group (M) Bhd (KL:MRDIY), Eco-Shop was reported by Bloomberg in March 2023 to be seeking to raise up to RM800 million from the listing.
Eco-Shop is seeking to expand, particularly in suburban and rural areas, and open about 70 new stores per year over the next five years, Ng said.
The listing will provide investors with “unique exposure to Malaysia's value retail segment”, said Michael Oh-Lau, CEO of Maybank Investment Bank. Eco-Shop would be “a compelling proposition for investors”, he said.
The proposed IPO involves an institutional offering of up to 675.368 million shares and a retail offering of 186.778 million shares, according to its draft prospectus filed with the Securities Commission Malaysia.
Eco-Shop is presently controlled by its founder and managing director Datuk Seri Lee Kar Whatt with a directly owned 80.3% stake and an indirect 2% stake, while Creador holds a 10% stake. Both are offering up shares for sale in the IPO.
Post-IPO, Lee's direct stake will drop to 73.9% while Creador will be left with 1.9%.
Maybank Investment Bank is the principal adviser and sole underwriter for the IPO. It is also the joint global coordinator and joint bookrunner of the IPO, together with UBS. RHB Investment Bank is also a joint bookrunner.