The IPO was scheduled before the end of the year, according to the source. The reason for the rejection is not known.
Maybank Investment Bank Bhd is the principal adviser, joint global coordinator, joint book runner, joint managing underwriter and joint underwriter for the IPO.
The other joint coordinator and joint book runner is UBS, while the other joint book runner and joint underwriter is CIMB Investment Bank Bhd.
Under its parent company Berjaya Retail Bhd (BRetail), SCB was planning to sell up to 530.33 million shares, comprising a public issue of 181.35 million shares and an offer for sale of up to 348.94 million existing SCB shares.
SCB would have been the tycoon’s third IPO on Bursa Malaysia this year. The other companies listed this year are Berjaya Auto Bhd and Caring Pharmacy Group Bhd. Berjaya Sports Toto is in the process of listing its business trust in Singapore.
The SC had not responded to queries by The Edge Financial Daily on the matter at press time. Berjaya Corp Bhd, the ultimate shareholder of SCB, could not be reached for comment.
This is not the first time that Tan has encountered such a situation.
Berjaya Auto Bhd (BAuto), which floated shares on Bursa two weeks ago, also hit a snag with its listing exercise in 2011. The SC rejected the application for the listing of its 80% owned subsidiary, Bermaz Motor Sdn Bhd, through listing vehicle BAuto. The listing was rejected due to a deficit in Bermaz’s net operating cash flows.
Nonetheless, the car distributor made a strong debut on the Main Market as its share price closed 160% higher at RM1.12, above its offer price of 70 sen per share.
BAuto’s strong debut overshadowed Caring Pharmacy’s performance on its maiden trading day. Caring’s share price ended 46.4% higher at RM1.83 against its offer price of RM1.25. The counter closed at RM1.74 last Friday, down from RM1.76 a day earlier.
Tan holds a 17.08% stake in Caring via Jitumaju Sdn Bhd, making him the second largest shareholder after Motivasi Optima Sdn Bhd that is owned by several parties.
SCB’s listing would have been a second foray for 7-Eleven on Bursa Malaysia after its previous listing under BRetail three years ago.
Tan took BRetail private in 2011, nine months after it was listed in August 2010 because of its depressing share performance.
BRetail, which is involved in the marketing and direct selling of consumer durables via instalment schemes under Singer (Malaysia) Sdn Bhd, was listed at a price-earnings ratio of 21.7 times based on its IPO price of 50 sen and pro forma consolidated profit after tax for 2009 financial year (FY09).
SCB’s IPO was initially to fund the company’s expansion and refurbish its 7-Eleven stores. It was also planning to upgrade its information technology systems and to use the funds for working capital.
The company’s offer represented up to 43% of its enlarged paid-up share capital, of which 490.78 million shares or 39.8% would have been offered to institutional investors.
The balance of 39.55 million shares or 3.2% was to be allocated to retail investors. There was an over-allotment option of up to 74.03 million shares or 14% of the IPO shares offered.
This article first appeared in The Edge Financial Daily, on November 25, 2013.
Written by Fatin Rasyiqah Mustaza of theedgemalaysia.com
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