7-Eleven Malaysia valued at RM 1.7b

KUALA LUMPUR: 7-Eleven Malaysia Holdings Bhd, which plans to raise up to RM731.85 million in its initial public offering (IPO), plans to open 600 new stores and refurbish about a third of its existing stores, over the next three years.
Its aggressive expansion plan is part of a move to capture even more of Malaysia's convenience store market, which still has a lower penetration rate than neighbouring countries Thailand, Japan, Taiwan and South Korea.
Malaysia is under-penetrated in terms of convenience stores relative to the region, with only 131 outlets per one million people, versus 192 outlets per one million people in Thailand, 340 in Japan, 429 in Taiwan and 490 in South Korea.
"7-Eleven Malaysia's listing marks new milestones for the market. Its IPO will be Malaysia's largest IPO launched year-to-date and the biggest retail sector IPO on Bursa Malaysa to date. Upon listing, 7-Eleven Malaysia's market capitalisation will be about RM1.7 billion," Maybank Investment Bank Bhd (Maybank IB) CEO John Chong said during the launch of the 7-Eleven Malaysia's prospectus launch here yesterday. Domestic Trade, Cooperatives and Consumerism Minister Datuk Seri Hasan Malek and Berjaya Group founder Tan Sri Vincent Tan Chee Yioun were there to witness the launch.
Of its eight cornerstone investors Capital Research and Management, Genesis, AIA, Matthews International, Macquarie Fund Management, Albizia Capital, York Capital and UOB Asset Management, five are participating as a cornerstone investor in a Malaysian IPO for the first time. In total, the cornerstone investors will take up 62% of the overall institutional offering, among the highest ever for a Malaysian IPO.
7-Eleven Malaysia's IPO involves an offering of a total of up to 530.325 million shares, which includes an offer for sale of up to 348.940 million existing shares and a public issue of 181.385 million new shares. Issue price is fixed at RM1.38 per share.
Its director Lena Tan Wai Foon said in terms of capital expenditure over the next two years, its biggest investment will be in its IT infrastructure and logistics.
"We're spending about RM280 million in both IT investments and logistics capability. Beyond that, we've ongoing expansion in terms of opening 200 stores a year and the refurbishment of 200 stores a year, which cost us an additional RM80 million annually."
"We've strong cashflow in our business and internally generated funds should be more than sufficient to fund the expansion of our stores," she added.
7-Eleven Malaysia deputy CEO Gary Brown said the company plans to open between 30% and 35% of the new stores in the Klang Valley. Currently 50% of all 7-Eleven stores are in the Klang Valley.
Maybank IB and Kenanga Investment Bank Bhd are acting as the joint principal adviser, joint bookrunner, and joint underwriter. Maybank IB is also joint global coordinator.UBS AG is acting as the joint global coordinator and joint bookrunner of the institutional offering outside of Malaysia.
7-Eleven Malaysia is scheduled to be listed on Bursa Malaysia on May 30, 2014.
Formerly known as Seven Convenience Bhd, which runs the country's largest convenience store (C-store) chain, is a spin off from Berjaya Retail Bhd.
The first standalone 24-hour convenience store to open in Malaysia, its market share now stands at 82%. With a formidable network of stores, 7-Eleven Malaysia is 10 times bigger than its closest competitor and has more outlets than the combined total of the three largest convenience store chains after 7-Eleven Malaysia.