Jumbo Group's S$40m IPO in the pot

AFTER simmering for about a year, the much-awaited float of crab restaurant owner Jumbo Group has finally come to a boil.

Jumbo will be raising about S$40 million via a S$22.1 million Catalist initial public offering of 88.23 million shares at S$0.25 apiece plus another S$18.03 million from cornerstone investors, it said on Wednesday.

The two cornerstone investors are Temasek arm Heliconia, which will pay S$10 million for a 6.2 per cent stake, and OSIM founder Ron Sim who will pump in slightly over S$8 million for a 5 per cent stake, according to the company's offer document posted on Catalodge on Wednesday.

Jumbo Group chief executive officer Ang Kiam Meng told a press briefing on Wednesday that the group's main revenue generator was its Jumbo Seafood outlets, where the signature dish is crab.

It sells about 1.6 tonnes of crabs every day across Singapore and Shanghai, he noted, adding that Singapore accounts for the bulk of that at 1.2 to 1.4 tonnes daily. Its mud crabs come from Sri Lanka, India, the Philippines and South Africa, and Mr Ang said the company may start to sell higher-quality Dungeness crabs as well.

He was also unfazed by competition from the growing popularity of new restaurants that serve up seafood boils, saying that Jumbo's chilli crabs were seen as a traditional Singapore dish rather than a fad.

But with equity markets drying up, one question is whether the float will turn out to be a damp squib.

Mr Ang said the IPO was "not really for fund-raising" but more to give the group a bigger platform and better exposure so that it could grow faster, adding that it plans to remain in the mass-market segment of the F&B industry for now.

The group said in its offer document that it had about S$58 million in cash and cash equivalents and total indebtedness of S$857,000 as at July 31, 2015.

Jumbo had been reportedly planning an IPO as early as September 2014, according to media reports.

The IPO retail tranche has two million shares while the placement tranche has 86.23 million shares. The share application period closes on Nov 5 and Jumbo is expected to make its Catalist debut on Nov 9.