EDBI-backed mooring systems company Mooreast to raise $8.5m in Catalist listing

Mooreast's chief executive Sim Koon Lam said he expects the group's shift into renewables to pay off handsomely.
Mooreast chief executive Sim Koon Lam said he expects the group's shift into renewables to pay off handsomely.PHOTO: MOOREAST

SINGAPORE (THE BUSINESS TIMES) - Mooreast Holdings on Wednesday (Nov 17) launched its initial public offering (IPO) for a listing on the Catalist board of the Singapore Exchange (SGX).

The mooring systems company will offer 0.8 million offer shares and 38.05 million placement shares at 22 cents apiece. This will bring the total gross proceeds from the IPO to some $8.5 million.

EDBI, the investment arm of Singapore's Economic Development Board, has invested $10 million in the company as a pre-IPO investor.

Mooreast is a total mooring solutions specialist that primarily services the offshore oil and gas, marine and offshore renewable energy industries.

In an interview with The Business Times, Mooreast chief executive Sim Koon Lam said the group's solutions include the design, engineering and fabrication of mooring systems, as well as components such as steel wire ropes, anchor chains, high-holding-power anchors and sinkers. These help keep offshore oil rigs firmly rooted in the seabed and stable.

Renewable energy is expected to be an important growth driver for the company, which will have a theoretical market cap of $57 million.

Mr Sim said the group moved into the renewables space in 2013, after the 2011 earthquake and tsunami in Japan "opened up new opportunities" for the company to kick-start this pivot.

He expects the group's shift into renewables to pay off handsomely amid the global energy transition. Mooreast is also in the middle of a "technological migration" - leveraging its understanding of the oil and gas market and applying the relevant technology to different types of offshore floating renewable energy sources.

One of Mooreast's biggest areas of focus is floating wind platforms, but the group is also able to provide solutions for solar and tidal platforms.

About half of Mooreast's IPO proceeds, or $4 million, will be used to develop the group's upgraded waterfront facility at 51 Shipyard Road in Jurong, and scale up operations in anticipation of floating wind-energy prospects. Mooreast will also invest in additional equipment and machinery.

Another $1 million, or 11.7 per cent of the IPO proceeds, will be channelled towards merger and acquisition activities, primarily in the renewables space, said Mr Sim. The group will focus on acquiring IT or tech companies that can help it enhance its operations in the renewable energy sector, he added.

Mooreast will use another $0.5 million of the IPO proceeds to develop and grow its renewable energy division. Among other things, the company wants to strengthen its engineering capabilities by recruiting more engineers and professionals with the relevant experience and expertise, and set up a research and development team to source for new products and technology.

Another $1.2 million of the proceeds will be used for general corporate and working capital purposes, with the remaining $1.8 million earmarked for invitation and listing-related costs.

For the first six months of 2021, Mooreast reported unaudited profit after tax of $0.4 million, down significantly from $2.3 million in the year-ago period. Revenue fell 22.9 per cent to $7.2 million from $9.3 million.

Looking ahead, Mooreast is expecting the recovery of the oil and gas sector and the increasing demand for renewable energy to support its growth in the coming years.

Mr Sim said the company is involved in several discussions in the renewable energy space, and is hoping that these discussions will become actual contracts. In the oil and gas space, the company is involved only in a few contracts.

Mr Sim started out in the industry by joining the Singapore subsidiary of Dutch offshore contractor Vrijhof Ankers Beheer in 1992, but switched to fabrication in 2007 by buying out Mooreast.

Having been in the industry for the past three decades, he said one of the most important requirements for a company to survive in the competitive industry is to remain flexible and adapt to change.

"(I've) gone through several ups and downs, and every up and down is a different problem," he said. "So you learn new things, then you encounter and you see how to solve it."

Applications for the IPO close at noon next Monday, while trading of the company's shares is expected to commence at market open next Wednesday.