KUALA LUMPUR: Pappajack Bhd, en route to a listing on the ACE Market of Bursa Malaysia on April 1, 2022, plans to raise RM50.1mil in proceeds from its initial public offering (IPO) of 167 million shares at 30 sen apiece
Of the proceeds, RM19.22mil will be allocated to the expansion of Pappajack’s new pawnbroking outlets within Peninsular Malaysia, RM27.08mil will go towards cash capital to existing pawnbroking outlets while the remaining RM3.8mil will be used to defray listing expenses.
Kuala Lumpur-based Pappajack, which provides licensed pawnbroking services under the Housing and Local Government Ministry and governed by the Pawnbrokers Act 1972, provides short-term micro-loan finance services to customers who pledge gold and luxury watches.
It currently has a network of 25 pawnbroking outlets and plans to open five new pawnbroking outlets to serve a wider market.
"By expanding our network of pawnbroking outlets, we would be able to increase our market presence and serve a wider customer base. The expansion will support and contribute positively to our financial performance in the future," said Pappajack managing director and CEO Lim Boon Hua in a statement announcing the launch of the IPO prospectus.
Lim noted that pawnbroking services play a vital role in the financial ecosystem by providing short-term micro-loans to the unserved or underserved who need immediate cash quickly which is easily accessible.
He added that the main stream financial institutions’ emphasis on credit lending have made pawnbroking services which is principally base on asset lending more important among people who otherwise may not be able to get cash funding.
The IPO entails 33.4 million shares to be allocated to the Malaysian public, 6.68 million to eligible persons, 83.5 million for private placement to Bumiputera investors and 43.42 million for private placement to selected investors.
Kenanga Investment Bank Bhd is the principal adviser, sponsor, sole underwriter and sole placement agent of the IPO.