KUALA LUMPUR (June 29): RT Pastry Holdings Bhd (KL:RT) ended its first trading day on the ACE Market below its initial public offering (IPO) price amid broader market weakness.
The bakery chain operator's shares closed at 16 sen on Monday, two sen or 11.1% lower than the IPO price of 18 sen per share. At the closing price, the company’s market capitalisation was RM54.2 million.
The counter opened at 17.5 sen and was traded between 16 sen and 18 sen for the rest of the day, with more than 46 million shares changing hands.
The muted debut came as investors reacted to news of renewed conflicts in the Middle East, though the US and Iran have agreed not to further escalate their weekend strikes. Strong interest in RT Pastry ahead of the listing also helped, with investors oversubscribing to the IPO by nearly 60 times.
RT Pastry, which runs a chain of eponymous bakeries, is founded and headed by Lu Chun-Neng, a 47-year-old Taiwanese who set up the first store in 2003 with his wife’s family. RT Pastry currently operates 17 bakery outlets across the Klang Valley.
The company will be using 46% of the proceeds to open another four outlets in the Klang Valley and two in Pahang over the next two years. The plan also calls for new equipment, such as depositors and cake-cutting machines, involving about 5% of the IPO proceeds.
The remaining 48% of the funds raised will go towards repaying bank borrowings and covering listing expenses.
The IPO only involves the issuance of new shares without any offering of existing shares, meaning that existing shareholders are not cashing out of the company.
KAF Investment Bank is the principal adviser, sponsor, underwriter, and placement agent for the IPO.
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