SHAREHOLDERS of Sin Chew Media Corp Bhd are selling some RM169.65mil worth of shares in a share sale exercise that will see the company, the publisher of two major Chinese dailies Sin Chew Daily and Guang Ming Daily, listed on the main board of Bursa Malaysia next month.
The media company yesterday issued its prospectus in line with its listing, scheduled for Oct 18.
Sin Chew shareholders led by tycoon Tan Sri Tiong Hiew King are offering for sale, 73.62 million Sin Chew shares of 50 sen par value or 24.4% of the company's paid up share capital of RM151mil as part of the listing exercise, making it the third largest initial public offering (IPO)in terms of funds raised this year, after KLCC Property Holdings Bhd and OSK Ventures International Bhd.
Of the total, 15.1 million shares will be offered to the public at an indicative retail price of RM2.25 a share, while 32.77 million would be made available to bumiputra investors approved by International Trade and Industry Ministry.
Another 20 million shares would be offered to institutional investors under a book building exercise at an indicative price of RM2.45 a share.
Sin Chew staff and business associates have been offered a total 5.76 million shares at an offer price of RM2.25 each.
Deputy Finance Minister I Datuk Dr Ng Yen Yen launched the Sin Chew listing prospectus in Kuala Lumpur yesterday.
The closing date for retail offering is Sept 27 while that for the institutional offering is Sept 29.
The final retail offer price will be determined on Oct 1, after its book building process has been completed.
Post-listing, Tiong's shareholding in Sin Chew will be reduced to 41.5% from 55.4% previously. Other shareholders, namely EON Capital Bhd, Subur Tiasa Holdings Bhd and Jaya Tiasa Holdings Bhd, will see their collective shareholding reduced to about RM34.5% from 44.5%.
According to the listing prospectus, Sin Chew expects to post a pre-tax profit of RM62.9mil in the current year to March 31, 2005, up 26.3% from RM55.34mil previously, while revenue is anticipated to increase by 20.9% at RM462mil from RM382mil.
At a press conference later, Sin Chew executive director Gan Chin Kew said the company was “quite positive and optimistic” that it would benefit from a higher adex growth this year.
He also said Sin Chew was nearing the completion of a RM100mil capital investment that would among others, double its printing capacity, reduce costs and enhance efficiencies.
CIMB Bhd chief executive officer Datuk Nazir Razak said total national advertising expenditure (adex) was expected to increase by 10% to more than RM4bil this year and would continue to grow in tandem with the economy.
CIMB is the adviser, lead manager, sole book runner and managing underwriter for the Sin Chew IPO.
“Newspapers remain the preferred media for advertisers and command the lion's share of the total adex. Sin Chew, being the market leader in the Chinese newspaper segment, offers itself as a proxy to the growing adex in the Chinese language segment,” Nazir said.
As for Sin Chew's IPO, he said the indicative retail price of RM2.25 a share would translate to a net price to earnings (PE) multiple of 12.3 times.
“With the strong fundamentals of the company, the IPO is expected to be well received by investors,” Nazir added.
He added that the past one and a half weeks had seen three successful large US dollar debt and equity transactions by Malaysian companies such as IOI Corp Bhd, Telekom Malaysia Bhd and Commerce Asset-Holding Bhd, which was a testament of significant renewed interest in the Malaysian market.
“And I expect it to translate soon into a more buoyant stock market. I think this deal (Sin Chew IPO) is well timed,” Nazir said.