AppAsia to raise up to A$6m via ASX IPO for subsidiaries

This article first appeared in The Edge Markets, on March 13, 2017.

KUALA LUMPUR (March 13): AppAsia Bhd plans to inject four subsidiaries into AppAsia Ltd (AL), which it intends to list on the Australian Securities Exchange (ASX).

The four wholly-owned subsidiaries are: directly held AppAsia Studio Sdn Bhd, AppAsia Mall Sdn Bhd and AppAsia International Sdn Bhd, and indirectly held AppAsia International Pty Ltd.

The four will be injected into AL for a collective A$658,946 or RM2.24 million — a 39% discount from AppAsia’s original cost of investment totalling RM5.74 million — to be satisfied via the issuance of 55 million AL shares to AppAsia.

AL was incorporated to act as the holding company of the subsidiaries for the Australian listing, which it proposed last November.

On completion of the asset injection, the subsidiaries will become wholly-owned units of AL. Subsequently, AL is looking to raise up to A$6 million via an initial public offering (IPO) on the ASX at 20 Australian cents per share, which will bring AppAsia’s stake in AL to between 49.73% and 54.78% post-exercise.

In turn, the four companies will be streamlined under AL alongside Admall Sdn Bhd, which runs an online health product retail platform in Malaysia. AL inked an agreement today to acquire Admall for A$1.19 million or RM4.06 million via the issuance of 24.99 million AL shares to Datuk Patrick Tan Boon Jin, Datuk Vimmy Yap Mee Ling and Chin Wai Shoong.

Post-IPO, Tan may hold between 9.04% and 9.96% in AL, Yap may have 7.23% to 7.97%, while Chin may get between 6.32% and 6.96%.

In a bourse filing today, AppAsia said the exercise will consolidate its online business and improve operational efficiency.

Proceeds from the IPO will be mainly used by AL to expand its businesses in the Southeast Asian region (54.2%), working capital (24.5%), research and development (8.3%), and to defray expenses for the proposals (13%).

The group expects the proposals to be completed by the third quarter of this year. “The proposed disposals and the proposed listing are inter-conditional and will be completed simultaneously,” AppAsia added.

Shares of AppAsia closed unchanged at 40.5 sen today, giving it a market capitalisation of RM115.37 million.

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