KUALA LUMPUR: Mini-market chain operator 99 Speed Mart Retail Holdings Bhd has filed a draft prospectus for an initial public offering (IPO) on the Main Market of Bursa Malaysia as part of its plan to grow to 3,000 stores nationwide.
According to draft prospectus, the company is planning an IPO of up to 1.428 billion ordinary shares in 99 Speed Mart, comprising of an offer for sale of up to 1.028 billion existing shares and a public issue of 400 million new shares.
This represents up to 17 per cent of its enlarged issued shares.
1.218 billion IPO shares will be offered to institutions, while another 210 million issue shares will be part of the retail offering.
Proceeds raised from the IPO will be used for the expansion of new outlets in Malaysia, establishment of new distribution centres (DCs), purchase of delivery trucks, and upgrading of existing outlets.
Its outlets serve about 940,000 customers per day based on the number of sales transactions recorded in the financial year ended 2022, with an average sales transaction value per outlet per day of RM23.59.
"We are committed to strengthening our position as the largest mini-market chain retailer in Malavsia. "Our expenditure requirements are associated with our company's intentions to expand our outlet network, upgrade the equipment within our existing outlets and to invest in improving our logistics capabilities.
"These expenditures are geared toward sustaining and enhancing efficiency in supporting our growing outlet network and product range," it noted.
99 Speed Mart aims to have a network of 3,000 outlets nationwide by the end of 2025.
It currently operates 2,542 outlets.
99 Speed Mart operates a total of 19 DCs to service its nationwide retail network in all states that we operate in.
The built-up area of its DCs range from about 10,000 sq. ft to 120,000 sq. ft. Its DCs supply inventories to outlets that are generally within a radius of 100 km from the respective DCs.
By the end of 2027, it anticipates to operate at least 25 DCs, taking into account the replacement of an existing DC.
99 Speed Mart also owns 568 delivery trucks.
99 Speed Mart is the largest mini-market player and a leading groceries retailer in Malaysia, holding a market share of 37.9 per cent and 11.1 per cent in 2022.
CIMB Investment Bank Bhd is the principal adviser and underwriter for the IPO.