Singapore's biggest initial public offering (IPO) so far this year is under way with Malaysian tycoon Robert Kuok listing his PACC Offshore Services Holdings (Posh) yesterday.
Posh, the largest Asia-based international operator of support vessels for offshore oilfields in Asia, Africa and Latin America, plans to raise at least $388.3 million in gross proceeds through the sale of 337.6 million new shares at $1.15 a piece.
That would allow the company's IPO to trump the $346.4 million raised by the mainboard's only other listing this year, OUE Commercial Reit.
Including over-allotment of 46.1 million shares, which represents 18.3 per cent of the offering, the IPO is expected to raise $441.3 million. Its market capitalisation on listing will be about $2.1 billion.
The IPO pricing is at the lower end of an expected price range of between $1.13 and $1.24 a share.
"The placement is well-covered. We feel we have a good range of institutionals supporting the deal," Posh chief financial officer Geoffrey Yeoh said at a briefing yesterday.
About 40 million shares have been offered to the public at $1.15 a piece. The bulk of the offering - around 212 million shares - was placed out to institutional investors, including 25.2 million reserve shares for Posh staff and business associates, and its parent Kuok (Singapore) and its subsidiaries.
Cornerstone investors Hwang Investment Management and Fortress Capital Asset Management have agreed to take up 85.6 million shares in a move separate from the IPO.
Posh plans to use net proceeds of $374.8 million to repay part of the outstanding amounts under revolving facilities that have been used for working capital and capital expenditure purposes.
The IPO closes at noon on April 23, with trading of the shares set to start on April 25.
Chief executive and executive director Gerald Seow said: "We are well-positioned to capture market opportunities across all our business segments, maintaining our growth momentum and, in particular, expand into the deepwater offshore accommodation segment."
The company has a fleet of 112 vessels in operation and another 15 on order. It operates supply ships, harbour tugs and heavy-lift crane barges and provides shallow-water construction services and towage services for rigs. It has ordered offshore accommodation vessels. Posh achieved a 67.4 per cent net profit CAGR (compounded annual growth rate) in the financial years between 2011 and 2013, lifting earnings from US$26.2 million to US$73.4 million.
It plans to broaden its fleet diversification and expand into new markets such as Australia, Indonesia, Latin America, Europe, the Middle East and Africa. In December, the board gave in-principle approval for a capital expenditure budget of about US$291.5 million (S$365 million), mainly for fleet expansion.
Bank of America Merrill Lynch, DBS Bank and OCBC are the joint issue managers, bookrunners and underwriters.
This article was published on April 18 in The Straits Times.
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