The wholly locally-owned Mengly J Quach Education Plc (MJQE) plans to launch its initial public offering (IPO) in April to open up to investors, raise $10 million from the Cambodia Securities Exchange (CSX), and set up more schools.
In a February 11 notice, MJQE, an umbrella for Aii Language Centers (Aii) and American Intercon Schools (AIS), disclosed that it had applied with the Securities and Exchange Regulator of Cambodia (SERC) for the IPO, and expects an approval by March.
“We are now accepting indications of interest and requests for pre-allocated IPO shares until March 10, 2023.”
“Please book or request for pre-allocation of the shares now before the public subscription begins because the number of shares available during public subscription is limited while the price per share is at $0.51 which is subjected to approval by SERC, and the IPO is expected to be officially approved by mid-March.
“We plan to raise up to $10 million from the IPO by making 5.88 per cent shares of our company available [under] the IPO.
“The gross amount raised from the IPO for the company of approximately $7 million, plus our internal generated funds and new bank loans will be used to fund 20 new campuses’ expansion[s] over locations that [are] already secured in hand.
“In the event of stronger-than-anticipated demand, we will seek approval for a larger quantum of shares in the initial offering, capped [at] 20 per cent,” it said.
SERC director-general Sou Socheat confirmed to The Post on February 12 that the regulator has received the necessary paperwork for the IPO application, and that a technical team is reviewing the submission to assess whether or not the supportive documents meet the requirements.
However, Socheat said that the review process, as prescribed by law, could take as long as three-to-six months.
During the period, “we’ll inform them and the public” whether or not all the paperwork is correct, he said, stressing that the company will be obliged to fix any mistakes before the process resumes – “that’s why it could take us between three to six months to approve”.
Mengly J Quach, the founder, chairman, CEO and namesake of MJQE, recently told The Post that the plan is for the IPO to be listed on the CSX’s Main Board – as opposed to the secondary Growth Board that caters to smaller firms with high-growth prospects – to raise funds to expand the educational enterprise’s operations and take steps towards its goal of 160 active campuses nationwide.
Previous plans to go public were derailed in 2019 amid “kind of bad” economic signs – and then Covid-19 arrived, forcing MJQE to keep its IPO ambitions on hold until it determined that the pandemic storm had cleared, he lamented.
“One of the main purposes will be to raise funds to open more schools and reach areas where there is demand – we have over a hundred schools to go, right now we only have 15 campuses,” Mengly said. The websites of Aii and AIS show that they have seven and eight campuses, respectively.
The CSX reported that a total of 18 companies feature on the local bourse – nine of which have listed shares, while the rest have issued bonds – which have raised a total of $317 million through their offerings.
The bourse’s CEO Hong Sok Hour revealed late last month that around 36,000 CSX trading accounts have been opened, and confirmed that the average daily trading value on the bourse reached about $500,000 last year.
The CSX is co-owned by the Ministry of Economy and Finance and the Korea Exchange (KRX) on a 55:45 basis.