Sanli Environmental, an engineering firm in the water and waste management sector, is seeking to raise $9.7 million in net proceeds through an initial public offering (IPO) on the Catalist board.
Sanli is offering 52 million new shares at 22.5 cents apiece, comprising 49.5 million placement shares and a public tranche of 2.5 million. The public offer opened yesterday and will close on Tuesday next week.
At 22.5 cents a share, and with a post-IPO share capital of 268.7 million, Sanli will have a $60.4 million market value upon listing.
Trading is expected to commence on Thursday next week.
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Sanli chief executive Sim Hock Heng founded the company in 2006 with his colleagues from Dayen Environmental, a Singapore-listed water and waste treatment company now known as Moya Holdings Asia.
Mr Sim and Sanli's three other executive directors are all engineers with industry experience ranging from 15 years to 20 years.
In the nine months ended Dec 31 last year, net profit was $4.7 million, on revenue of $42.6 million.
Sanli's order book stood at $105.8 million as at May 1, and more than 50 per cent of that is expected to be fulfilled in 2018.
The company derives 99 per cent of its revenue from national water agency PUB, but plans to use the IPO proceeds to vie for bigger contracts, buy another factory, and take up projects for other companies and townships in the region.
Sanli's biggest contract, so far, is worth $114.8 million - a process upgrading project at PUB's Choa Chu Kang Waterworks - which it is jointly undertaking with another company. Sanli's portion of the project is worth about $50 million.
Mr Sim said: "At the moment, we are very comfortable with contract values between $10 million and $20 million.
"But we can see the infrastructure that the Government has planned, from deep tunnel sewerage systems to incineration plants. These contract figures are in the billions, and stretch all the way to 2025. In a nutshell, we believe water is one good industry."
Post-IPO, 74.28 per cent of the company will be controlled by Sanli's executive directors. Temasek Holdings unit Heliconia Capital, which extended Sanli a $2 million convertible loan in February, will hold a 5.36 per cent stake.
SAC Capital is the sponsor, underwriter and placement agent.