ValueMax IPO draws strong investor demand at 6.3 times subscribed

Funds will bankroll Singapore, Malaysia expansions.

Pawnbroking chain ValueMax Group Limited (ValueMax) announced that its initial public offering (IPO) of 138 million New Shares priced at $0.51 each, has received overwhelming interest from investors, said the company.

The Invitation comprised 5 million Offer Shares to the public for subscription and 133 million Placement Shares. As at the close of the Invitation at 12.00 noon on 28 October 2013, there were 10,576 valid applications received for the 5 million Offer Shares available to the public for subscription. In total, these applicants applied for an aggregate of 731,564,000 Offer Shares, with application monies received amounting to approximately $373.1 million.

In addition, the Group received valid applications for 132,895,000 Placement Shares and application monies received for these Placement Shares amounted to approximately $67.8 million.

Based on the total invitation size of 138 million New Shares and the total valid applications amounting to 863,939,000 New Shares (comprising valid applications received for 731,564,000 Offer Shares and 132,375,000 Placement Shares, excluding the New Shares validly subscribed for by connected persons and the persons in Rule 232 and Rule 240 of the SGX-ST Listing Manual), the Invitation was approximately 6.3 times subscribed.

Canaccord Genuity Singapore Pte. Ltd. is the Issue Manager, Underwriter and Placement Agent of the IPO.

Trading of ValueMax’s shares on the Mainboard of the Singapore Exchange Securities Trading Limited (SGX-ST) is expected to commence on a “ready” basis at 9.00 a.m. on 30 October 2013.

Based on the Issue Price of $0.51 per share, the market capitalisation of ValueMax will be $272.1 million upon listing.

Commenting on the overwhelming response to the IPO, Mr Yeah Hiang Nam, Managing Director and CEO of ValueMax said, “We are delighted to have garnered such strong reception to our IPO and also honoured to be the first pawnbroking chain to be listed on the Mainboard of the Singapore Exchange. Having established a strong track record and with our in-depth industry knowledge, we will be using the funds raised to strengthen our presence in Singapore and in Malaysia, as well as expand our operations to other countries if there are opportunities. We believe our listing on the Mainboard will help to raise our corporate profile, which may then translate into more business opportunities for the Group and propel our business to greater heights.”

As part of its future plans, ValueMax intends to strengthen its presence in Singapore by acquiring businesses and setting up new pawnshops and pre-owned jewellery retail outlets. ValueMax also intends to expand in Malaysia when its associated companies in Malaysia set up new outlets or acquire other pawnshops as and when suitable opportunities arise. In addition, the Group will also explore opportunities to expand its operations to other countries.

The Group also plans to open a flagship store in a central location in Singapore in the second half of 2014. This flagship store, comprising a pawnshop and a pre-owned jewellery retail outlet, will target different market segments, including high net worth individuals (HNWI),. The flagship store will carry items of higher value as well as provide personalised services to the HNWIs in the privacy of VIP rooms.

The Group also intends to further develop its pre-owned jewellery retail brand, “Spring Jewellery" by opening new pre-owned jewellery retail outlets under the “Spring Jewellery” brand.

Going forward, the Group also seeks to achieve a higher degree of integration of its businesses, as well as increase its branding and marketing activities.

The Directors intend to distribute 50% of the Group’s profit after tax attributable to Shareholders for each of FY2013, FY2014 and FY2015 as dividends (which could include scrip dividends), subject to the factors set out in the section entitled “Dividend Policy” of the prospectus issued by ValueMax in connection with the Invitation.