DLF Holdings, a mechanical and electrical engineering services company, said yesterday that it plans to raise about $2.9 million in net proceeds from its initial public offering (IPO), with its shares to be listed on the Catalist board.
The gross proceeds - that is, proceeds before associated costs such as management fees for the IPO are stripped out - stand at about $4.26 million. The IPO will be done through a placement of 18.5 million shares at 23 cents apiece.
DLF said in a press statement that it operates mainly as a sub-contractor for its project management services. These include work for plumbing and sanitary systems, as well as ventilation and air-conditioning systems.
DLF can also take on the role of main contractor for turnkey contracting services. In such cases, it acts as the main contractor to oversee the construction of new buildings, or the refurbishment and upgrading of existing ones.
It has completed several projects in Singapore and the Maldives in recent years, including work for Sengkang General Hospital and Sengkang Community Hospital, and for the five-star InterContinental hotel in the Maldives.
It intends to use part of the proceeds to seek out mergers and acquisitions (M&A), joint ventures and strategic alliances.
DLF chief executive Wong Ming Kwong said: "Our listing on the Singapore Exchange will help us to expand our business and elevate our company profile.
"In addition to organic growth through securing more projects, we will also be looking at M&A opportunities to increase our scale and scope."
In its prospectus, DLF said its order book for its project management services and turnkey contracting services stood at about $2.6 million and $3.8 million, respectively. These orders would translate into revenues for the group over the next one to three years upon project execution, it added.
For the financial year ended Dec 31 last year, DLF's revenue was up 15 per cent to $21.5 million from the year-ago period. This was mainly because of an increase in sales from its turnkey contracting services segment, partially offset by the decrease in revenue of its project management services business.
Net profit for the 2017 financial year stood at $3.4 million, a 72 per cent increase from the 2016 financial year, as a fall in expenses and a higher profit margin helped to lift the bottom line.
The placement will close at noon next Monday. Trading of the company's shares on the Catalist board is expected to begin at 9am next Wednesday.
PrimePartners Corporate Finance is the sponsor, issue manager and placement agent to the company.