PropNex prices IPO at 65 cents a share

PropNex Realty has priced its initial public offering (IPO) at 65 cents apiece.

In its prospectus registered yesterday, the company said it will offer 42.5 million shares, comprising 40.375 million placement shares and 2.125 million public offer shares.

This will give the largest home-grown real estate agency a market capitalisation of $240.5 million based on an enlarged share capital of 370 million shares.

Concurrently, 50 million shares will be sold at the offer price to cornerstone investors Affin Hwang Asset Management, FIL Investment Management (Hong Kong), Nikko Asset Management Asia, NTUC Income Insurance Co-operative, Samsung Asset Management (HK) and Value Partners Hong Kong.

The public offer closes at noon on Thursday.

The IPO is expected to raise net proceeds of $38 million, of which $12 million is earmarked for local and regional expansion through mergers and acquisitions, joint ventures and partnership strategy.

Some $8 million is slated for its real estate brokerage business; $7 million for expansion in a range of business services; and $6 million for enhancing technology. The remaining $5 million will go towards working capital purposes.

PropNex, which has 7,248 sales staff, said in its prospectus that it has a leading market share of 42.7 per cent in the residential primary private market and 45.3 per cent of the residential HDB resale market .

In a separate statement yesterday, executive chairman and chief executive Ismail Gafoor said that contrary to recent media reports, neither he nor PropNex had indicated that the transfer of sales personnel from Dennis Wee Realty to PropNex following a merger would be cost-free.

A version of this article appeared in the print edition of The Straits Times on June 26, 2018, with the headline 'PropNex prices IPO at 65 cents a share'. Print Edition | Subscribe