Parkson Holdings Bhd has priced its regional retail arm Parkson Retail Asia Pte Ltd (PRA) at an IPO price of S$0.94 (RM2.33) per share.
The IPO valued the whole of PRA at S$636.7 million, which is a decent 18.2 times its net profit of S$35 million for FY11 ended June 30. However, the size of the IPO that will comprise the issuance of 80 million new shares is smaller than previously anticipated.
In a statement to Bursa Malaysia, Parkson Holdings said PRA’s listing on the Singapore Exchange (SGX) will involve an offering of 147 million shares — 80 million new shares to be issued by PRA and 67 million existing shares by the vendors Parkson Holdings and its Indonesian partner PT Mitra Samaya.
Note that in a circular to shareholders recently, Parkson Holdings had said PRA would issue new shares representing up to 18.9% of the company’s enlarged capital. But now with only 80 million new shares to be issued, as announced yesterday, this works out to only 11.8% of PRA’s enlarged capital of 677.3 million shares. PRA’s shares base before IPO was 597.3 million.
PRA — 90.1% owned by Parkson Holdings and 9.9% by Mitra before the IPO — is a department store operator with operations in Malaysia, Vietnam and Indonesia.
According to Parkson Holdings, 136.15 million or 92.6% of the PRA IPO shares will be offered by way of an international placement to investors, which includes institutional and other investors in Singapore. The remaining 10.85 million shares, excluding up to 3.5 million shares reserved for the directors, management and employees of the Parkson Asia group, will be offered to the public.
Parkson Holdings said the IPO is expected to raise total gross proceeds of S$138.2 million. Based on the 80:67 ratio of the new shares and offer for sale shares, S$75.2 million of the total proceeds will go towards PRA for business expansion with the rest going to Parkson Holdings and Mitra.
PRA proposes to utilise a total of S$69.2 million in net proceeds to open new stores in Malaysia, Indonesia, Vietnam and Cambodia (S$60 million), information technology investment (S$5 million), and part of maintenance capital expenditure in Malaysia, Vietnam and Indonesia (S$4.2 million).
Parkson Holdings, which stand to receive S$56.7 million from the IPO proceeds, has yet to announce how it would utilise the money. The company said it would inform shareholders at a latter date.
In a Bloomberg report yesterday, it said PRA plans to pay dividends of between 40% and 50% of its distributable profits, according to the IPO prospectus.
PRA posted a S$35 million net profit in the 12 months through June, up from S$22.4 million a year earlier.