Next IPO to watch out - JCY

JCY to offer 25.9pc shares in listing

2009/12/09

JCY International Bhd, planning what may be Malaysia's second-largest initial public offering in six years, may offer 25.9 percent of its stock in its IPO.

JCY's stockholders plan to offer as many as 530.2 million shares, the maker of hard-disk drive components said in a prospectus filed to Malaysia's Securities Commission today, without specifying any price or timing. Of the total, 89 percent of the shares will be offered to institutional investors and the remainder to individuals, it said.

The sale may raise as much as RM1 billion (US$295 million), the Edge newspaper reported on Dec 5, citing unidentified people. That would make it the second-largest IPO in six years in Malaysia, where the benchmark index has risen 44 per cent this year, after Maxis Bhd.'s record RM11.2 billion offering last month. JCY International Chairman Rozali Mohamed Ali yesterday declined to confirm the reported IPO size.

"It will be a large issuance in the sector itself and this help fund managers diversify their holdings," said Pankaj Kumar, who manages 1.9 billion ringgit of assets as chief investment officer at Kurnia Insurans (Malaysia) Bhd in a telephone interview today. "We will definitely look at it."

A listing would allow JCY to enhance its profile and raise funds through share sales to pay for expansion, according to the prospectus. CIMB Holdings Bhd and UBS AG will manage the sale.

Western Digital

Almost 65 percent of JCY's sales last year were from Western Digital Corp., the world's second-largest maker of hard- disk drives. Other customers include Japan's Nidec Corp and Seagate Technology, according to the prospectus.

Y.K. Yong, a 54-year-old Malaysian businessman who holds his stake through a company called YKY Investments Ltd., is the only listed shareholder in the prospectus. Yong founded Malaysian hard-disk drive components manufacturer PCA Hard.Com Sdn Bhd and has 20 years of experience in that industry, according to the prospectus.

The company has targeted about RM182 million for capital expenditure in the coming fiscal year to expand in Malaysia, Thailand and China, the prospectus said. - Bloomberg

Via Business Times