SINGAPORE - ERA Realty, one of Singapore's largest real estate agencies, is finally making a return to the public markets after delisting in November 2012.
APAC Realty, which operates under the ERA brand, plans to raise net proceeds of S$27.1 million by selling 48.9 million shares at 66 Singapore cents apiece in an initial public offering (IPO).
The IPO will comprise 4.8 million new shares and 44.1 million vendor shares, APAC Realty said in prospectus for a listing on the Singapore Exchange mainboard on Thursday (Sept 21).
ERA was listed on the SGX through its holding company Hersing Realty in 1998. It was delisted in 2013 and sold for about S$130 million by former parent Hersing Corp to private equity fund Northstar.
About 39.3 million cornerstone shares have already been taken up by cornerstone investors comprising FIL Investment Management (Hong Kong), Qilin Asset Management, Asdew Acquisitions and Azure Capital.
The IPO comprises a placement tranche of 44.5 million shares and a public tranche of 4.4 million shares.
The public offer will open at 9pm tonight (Sept 21) and close at noon next Tuesday (Sept 26).
Trading is expected to start next Thursday (Sept 28).
ERA Realty had 6,176 agents as of July, just behind PropNex which became the largest agency here with 6,688 agents after merging with Dennis Wee Group in June.
APAC Realty's net profit in the first quarter was S$4 million, doubling from S$1.9 million in the same period last year.
Chief executive Jack Chua told The Straits Times that he is confident of going into the results season soon after listing.
"The first quarter is usually not the best of the year," he added, since sales slow down during Chinese New Year and the year-end holiday season and brokerage revenue is booked roughly two months after a buyer signs the option to purchase.
Mr Chua said: "The property market is on the uptrend. That is really my advantage. People can see. When you talk to all these fund managers they really can see that the market is picking up."
Singapore contributed 99.9 per cent of group revenue last year. APAC Realty intends to use the IPO proceeds to focus on regional expansion.
It holds the ERA master franchise rights for 17 Asia-Pacific countries, but has a presence in only eight countries now with room to grow.
Mr Chua intends to use the IPO proceeds to buy over some sub-franchisees, which the group presently holds very small stakes in.
Expansion into new countries like China also creates a platform for referrals. Roughly 6 per cent of buyers here are foreigners, he said.
"In 2011, it was 18 per cent. It dropped because of ABSD (Additional Buyer's Stamp Duty), but people have already got quite used to ABSD and we're seeing more foreign buyers coming back."
Immediately post-IPO, 13.8 per cent of the company's shares will be in public hands, or 16.5 per cent if the over-allotment option of 9.75 million shares is exercised in full.
Northstar and certain senior employees of APAC Realty will retain a 74.7 per cent stake post-IPO, or 72 per cent if the over-allotment option is fully exercised.
DBS is the sole issue manager, bookrunner and underwriter for the IPO.