OldTown to raise RM79.2m from IPO June 22, 2011

OldTown to raise RM79.2m from IPO
June 22, 2011

KUALA LUMPUR: OldTown Bhd, which expects to raise RM79.2 million from its initial public offering (IPO), plans to invest RM52 million to build a new plant in Kawasan Perindustrial Tasek, Ipoh.

Group managing director, Lee Siew Heng, said the investment would be financed by the IPO proceeds, internal funds or bank borrowings.

He said the new plant would take over OldTown’s existing food processing operations in Kawasan Perindustrian Bercham and Taman Medan Bercham, Ipoh.

“With the new plant, we target to increase production capacity by 500% and centralise our operations,” he said after the launch of the IPO prospectus here today.

The first phase of the plant was expected to be completed in 2012 and the second phase in 2013, he said.

Lee said the “kopitiam” chain operator and instant beverage mix manufacturer, also planned to open 300 outlets in three years from the current 182 in Malaysia, Indonesia and Singapore.

“This year, we plan to open 38 outlets, of which 31 are in Malaysia, three in Singapore and four in Indonesia, with average investment of RM700,000 per outlet,” he said.

Lee said about RM19.7 million from the proceeds would be used to acquire 17 companies not yet owned by OldTown.

OldTown is expected to be listed on the Main Market of Bursa Malaysia on July 13, 2011.

The IPO encompasses a public issue of 63.4 million new ordinary shares and an offer-for-sale of 33 million vendor shares at an issue price of RM1.25 each.

Of the public issue, 48.4 million shares will be allocated for private placement, 10 million for the Malaysian public, and five million for eligible directors, employees and business associates of the group.

AmInvestment Bank Bhd is the principal adviser, managing underwriter, joint underwriter and joint placement agent while CIMB Investment Bank Bhd is the joint underwriter and joint placement agent for the IPO exercise.

- Bernama