Monday July 02, 2007
Ogawa to raise RM32m via rights issue, IPO
OGAWA World Bhd, a homegrown retailer of electrical massage products, plans to raise some RM32 million from a rights issue and an initial public offering (IPO) on the main board of Bursa Malaysia.
The company, which has more than 40 per cent of Malaysia's RM300 million health and wellness market, currently offers 23 products, including electrical massagers, slimming devices and blood- pressure monitors.
It is slated for a listing by end-March.
Ogawa plans to use the proceeds to buy a piece of land to site a new warehouse and acquire a fleet of trucks, executive director Louis Chong said.
"We hope to do it (IPO) as soon as posible as the market sentiment is good," Chong told reporters in Kuala Lumpur yesterday after the underwriting agreement signing ceremony for Ogawa's flotation.
It has appointed Public Investment Bank Bhd as adviser, managing underwriter, and placement agent for the IPO, while MIMB Investment Bank Bhd is the underwriter for the exercise.
Also present were Ogawa executive chairman Richard Wong, Public Investment chief executive (CEO) Teoh Cheng Soon, and MIMB executive director cum CEO Mohd Farid Datuk Nawawi.
Since the launch of Ogawa's first outlet in 1996, the Shah Alam, Selangor-based entity has grown its distribution channel to 107 stores across Malaysia, Singapore, China and Hong Kong.
These are on top of its 29 external exclusive dealers in Indonesia, Australia and Vietnam. While Ogawa does the research and design, the products are made by contract manufacturers in China, Japan and South Korea.
In the year to June 30 2006, overseas buyers made up 21 per cent of its RM136.1 million proforma revenue.
Last year sales jumped 35 per cent from RM100.5 million earned in 2005. Profit after tax in 2006, meanwhile, grew 26 per cent to RM11.7 million.
It plans to grow revenue by double digits annually.
Moving forward, the company also plans to make further inroads into Vietnam and China which are deemed high- growth markets, Chong said.
Ogawa's IPO involves an offer for sale of 36 million Ogawa shares by its shareholders to Bumiputra investors, and an issue of 17.2 million new shares.
The indicative IPO price is RM1 per share.
Of the 17.2 million securities, two tranches of six million units each are earmarked respectively for the local public, besides directors, workers, and key individuals in Ogawa. The remaining 5.2 million shares are for private placement to selected investors.
Ogawa's listing prospectus is due for release next month.