Kim Heng Offshore & Marine Holdings launches IPO at 25 cents a share

Kim Heng Offshore & Marine Holdings launched its initial public offering (IPO) today at a price of 25 cents a share, raising some $43.5 million in gross proceeds.

It is issuing 174 million invitation shares, comprising 160 million new shares and 14 million vendor shares. Three million of the shares will be made available by public offer.

The IPO price values the firm at $177.5 million. Key institutional investors include Credence Capital Fund II and Zana Asia Fund.

Kim Heng, which has been in the business for more than 40 years, is primarily engaged in two business segments - shipbuilding operations as well as providing offshore marine services and equipment.

Kim Heng has two shipyards located at Pandan Crescent and Penjuru Road.

Some of the company's customers include major offshore drilling contractors and support service providers such as Transocean, Seadrill and Noble Corporation.

For the first half of 2013, it made a net profit of $8.03 million, down from $10.6 million in the first six months of the previous year.

It made a profit of $17.3 million in 2012 on revenue of $86.7 million, while in 2011, it recorded a profit of $18.5 million on revenue of $69.4 million.

Kim Heng intends to use the bulk of the net proceeds of about $36.4 million - about $20 million - to enhance its yard facilities and expand its vessel fleet.

It could also use some $7 million to expand and diversify its service offerings in the oil and gas industry, which may include potential merger and acquisitions, joint ventures or strategic alliances.

The rest of the $9.4 million will be kept for general working capital purposes.

The IPO will close at noon on Monday Jan 20. Shares will begin trading on Catalist on Jan 22.

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