Bakery Chain, BreadTalk Launches Initial Public Offering Of 32 Million Shares

BackJun 04, 2003

Singapore, June 4, 2003 - BreadTalk Group Limited ("BreadTalk"), the holding company of a chain of bakeries that sell bread, buns, pastries and cakes baked in an innovative and creative manner, today launched its initial public offering (IPO) in conjunction with its listing on the Singapore Exchange Securities Trading Limited Dealing and Automated Quotation System (the "SGX-SESDAQ").

The 32,000,000 new shares consist of 3,200,000 offer shares and 28,800,000 placement shares to be offered at $0.24 each save for 5,000,000 Reserved Shares. The Reserved Shares will be reserved for independent Directors and employees of the Group which are offered at $0.205 each. The reserved shares will be subject to a moratorium of six months following the listing of BreadTalk.

The share offering, which represents 19.63% of the Group's enlarged share capital of 162,980,000 shares, is being offered at a historical price earnings ratio of 9.2 times based on net earnings for FY 2002.

The issue which opens today will close at noon on 11 June 2003, Wednesday.  Trading is expected to commence on 13 June 2003, Friday

Of the net proceeds of approximately $6.4 million:-

BreadTalk was founded in 2000 and has become a recognizable brand in the food and beverage industry. With 22 outlets in 3 years, the bakery has revolutionized the culture of bread consumption. Seeking to elevate the level of bread appreciation, it transformed the ordinary bread into a delicious, unique and novel eating experience. Customers are treated to a wide selection of visually appealing, aromatic and unique-tasting products. The open concept adopted in the interior design of all its retail outlets adds a refreshing touch to the whole shopping and eating experience. Customers are also able to view the baking process while making their selections.

BreadTalk's sales have risen by a compounded annual growth rate (CAGR) of more than 448%, from $1.2 million in FY2000 to $35.0 million in FY2002. Profit before tax grew from $2.6 million in FY 2001 to $4.6 million in FY2002. As a result of its performance, it was ranked first in the Enterprise 50 Start Up Awards 2002 organised by The Business Times and Accenture.

Its efforts at building strong brand equity have also earned it the "Singapore Promising Brand Award 2002" awarded by ASME. In the same year, BreadTalk was voted Singapore's Most Popular local brand in a poll organized jointly by the ASME and SPH.

What has made BreadTalk so successful? Group Managing Director and winner of Entrepreneur of the Year Award 2002, Dr George Quek said, "I believe one of the factors is that we are constantly developing new unique-tasting and visually attractive products to stimulate consumers' taste buds. Our research and development team has since introduced over 150 items, inspired mainly by social and cultural trends.

Today, BreadTalk plans to make waves in the regional scene as well. The recent opening of its first franchise outlet in Jakarta in April  was well received. There are plans to open a second franchise outlet by end of the year. Commenting on its future plans, Dr George Quek said "We have received invitations from many parties who are interested to franchise our concept in their countries since 2001. In February 2003, we entered into a master franchise agreement covering the Indonesian market."

"Our vision is to establish BreadTalk as a  brand and company known for its novel, trend-setting and delicious bread and pastries. Franchising is just one of the avenues to help us to rapidly achieve that.  Our direct investments in China at the end of the year would introduce more people to BreadTalk. With the support and experience of our team, we are well-positioned for this expansion," concluded Dr George Quek.

The existing shareholders are also confident and committed to the Company. In this regard, the existing shareholders have subjected themselves to a longer moratorium than the moratorium period required under the listing rules. For a 12-month period from the date of listing of BreadTalk, the existing shareholders will not dispose or transfer any of their existing shareholding interest. For the 12 months thereafter, the existing shareholders will not reduce to below 50 per cent of their original shareholding.

SBI E2-Capital Pte Ltd and The Development Bank of Singapore Ltd are the joint Lead Managers for BreadTalk's initial public offering.


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