Tiong Seng IPO

Tiong Seng Holdings plans to raise $48 million of which $9 million would be for repayment of loans from affiliated corporations. Hmm...I dislike this part.

BESIDES China Minzhong Food Corporation, construction group and property developer Tiong Seng Holdings too is heading for a Singapore Exchange mainboard listing.

Singapore-based Tiong Seng yesterday launched its IPO of 189 million new shares at 28 cents each.

Meanwhile, the IPOs of Cache Logistics Trust and Debao Property Development close today.

The invitation shares of Tiong Seng constitute about 25.1 per cent of its enlarged capital of 754 million shares. There will be an over-allotment option of up to 28.35 million new shares.

Of the 189 million new shares, 15 million are for public subscription and 174 million for placement.

The Singapore-based company, which has spread its wings to China and Papua New Guinea as well, is aiming to raise net proceeds of about $48 million. Of this, $20 million is earmarked for construction of pre-casting facilities. Tiong Seng is investing in and using technologies such as pre-casting and advanced form-work systems to help reduce reliance on labour and to boost cost efficiency. This is said to help it cope with the increase in foreign workers' levy and to boost its competitiveness.

Another $17 million will be used for expansion of property development business in China. Repayment of loans from affiliated corporations will take up $9 million and the remaining $2 million of the expected proceeds will go to working capital.

Tiong Seng's principal activities are construction and civil engineering in Singapore and property development in China. In Papua New Guinea, it also undertakes civil engineering projects.

Tiong Seng's chief executive officer Pek Lian Guan is upbeat about the group's future, saying: 'Construction demand in Singapore remains strong and Singapore will continue to be our core market for construction and civil engineering activities.'

The Building & Construction Authority (BCA) had projected that construction demand in Singapore will reach between $21 billion and $27 billion this year and between $18 billion and $25 billion in 2011 and in 2012.

'In China, we are a niche developer and will continue to focus on actively acquiring land use rights to develop residential and commercial properties in the second and third-tier cities,' Mr Pek added.

Tiong Seng's major ongoing projects in Singapore include a $430 million contract to design and construct stations and tunnels at Hillview and Cashew for stage 2 of the Downtown Line in partnership with GS Engineering and Construction Corporation.

The group also has four ongoing projects in the Bohai Economic Rim, one of the main economic zones in China.

In the first nine months of financial year 2009, Tiong Seng recorded net profit of $29.2 million on revenue of $301.7 million.

Last month, the group won a contract of about $150 million. This added to its order book of $953 million as at Feb 17, with most of the secured contracts expected to be fulfilled over the next 12 to 30 months.

The public offer opens today and closes on April 14. Trading is expected to commence on a ready basis on April 16.

From Business Times, "Builder Tiong Seng to raise $48m on SGX".

Singapore-based construction group Tiong Seng Holdings plans to raise some S$53 million through an initial public offering on the Singapore Exchange mainboard.

It's offering 189 million new shares at 28 cents each.

The new shares represent about 25 per cent of Tiong Seng's enlarged share capital of some 754 million shares.

There is an over-allotment option of up to 28.85 million additional new shares.

This represents less than 15 per cent of the new shares.

15 million new shares will be available to the public while 174 million will be placed out.

The proceeds will be used to build pre-casting facilities, expand its property development business, repay loans and for working capital.

Trading of the shares is expected to start next Friday.

Some of Tiong Seng's major completed construction projects include Marina Boulevard and St Regis Hotel.

As of February 17, Tiong Seng's order book for construction and civil engineering projects amounted to some S$953 million.

Last month, the group secured another contract worth S$150 million from the National University of Singapore for the construction of its Kent Vale NUS staff housing.

From Channel NewsAsia, "Tiong Seng Holdings aims to raise some S$53m through initial public offering".


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