Key Highlights:
- Appoints Kenanga Investment Bank Berhad and CGS International Securities Malaysia Sdn. Bhd. as joint underwriters for its anticipated Initial Public Offering exercise in July 2024.
Kuala Lumpur, Malaysia, 28 MAY 2024 – One of Johor’s leading pawnbroking service provider, Well Chip Group Berhad (“Well Chip” or the “Company”), has inked an underwriting agreement with Kenanga Investment Bank Berhad (“Kenanga IB”) and CGS International Securities Malaysia Sdn. Bhd. (“CGS MY”) on the 27th May 2024 to underwrite a total of 30 million shares in conjunction with the Company’s Initial Public Offering (“IPO”) and listing on the Main Market of Bursa Malaysia Securities Berhad (“Bursa Securities”).
The IPO exercise entails a public issuance of 150 million new ordinary shares in Well Chip (“Shares”) to be issued in the following manner:
(i) Retail Offering
- 30,000,000 Shares or 5.0% of its enlarged issued share capital, will be made available for application by the Malaysian public through a balloting process, of which 50.0% will be set aside for Bumiputera public investors.
(ii) Institutional Offering
- 45,000,000 Shares or 7.5% of its enlarged issued share capital, will be made available by way of private placement to institutional and selected investors; and
- 75,000,000 Shares or 12.5% of its enlarged issued share capital, will be made available by way of private placement to Bumiputera investors approved by the Ministry of Investment, Trade and Industry.
Kenanga IB is the Principal Adviser for the IPO. Together with CGS MY, it is also joint underwriter and joint placement agent for the IPO. The 30,000,000 Shares made available for Malaysian Public will be fully underwritten by Kenanga IB and CGS MY.
Subsequent to the public issuance of Shares, the enlarged share capital base of the group will be 600 million Shares. “The signing of the underwriting agreement today signifies a significant milestone towards our listing on the Main Market. The funds to be raised will be instrumental to grow our pledge books of existing pawnshops and set up new pawnshops,” said Madam Ng Hooi Lang, the group’s Chief Executive Officer.
Well Chip has managed to grow 25% year over year for the past 17 years consistently, and the group looks forward to maintaining this growth trend via growing its pledge book as well as increasing its pawnshop count. Well Chip will also be taking their first step in expanding outside of Johor to establish its presence in Melaka.
“We look forward to continue servicing the financially unserved or underserved community of Malaysia within a relatively quick processing time,” Madam Ng Hooi Lang further added.
Executive Director, Head of Group Investment Banking and Islamic Banking of Kenanga IB, Datuk Roslan Hj Tik stated, “We are excited to facilitate this significant step in the Company’s growth journey. Well Chip, with its pawnshops located at strategic locations coupled with its experienced directors and key management, has demonstrated commendable growth, especially in recent years. We look forward to working closely with the Company to ensure a successful IPO to raise funds for its continued growth.”
Chief Executive Officer of CGS MY, Pn. Azizah Mohd Yatim stated, “CGS MY is honoured to be part of Well Chip’s IPO by acting as their Joint Placement Agent and Joint Underwriter. This is our first IPO since the commencement of our investment banking business, and we are looking forward to working closely with the Company and fellow bankers to support the Group’s expansion plans and future endeavours.
Well Chip has been operating pawnshops since 2007, and since then, Well Chip has increased its presence throughout the state of Johor. Under the stewardship of a 3-female management team, they look forward to set up new pawnshops in Johor and Melaka in the next 2 years post IPO.
The Group intends to use a part of its IPO proceeds as working capital to increase its pledge book, which in turn is expected to contribute to the Group’s revenue. Part of the IPO proceeds is allocated for the initial set up costs and working capital requirements for new pawnshops to be opened. The remaining IPO proceeds will be used to defray the listing expenses.
Reference link:
https://theedgemalaysia.com/node/713329
