Sheng Siong IPO is launched (and why I'll give it a miss!!)

To follow up this post, "Sheng Siong IPO", the IPO is finally launched today! The carrot is that Sheng Siong will distribute as dividends up to 90% of net profit after tax in this year & next year.

Thereafter? No idea. Ought to dig into its prospectus for sure...

The offering price is $0.33 per share and that it offers 351.5 million shares of which 201.5 million are new shares and about 150 million are vendor shares. This part I don't like. I'd prefer Vendor keeping their own shares. If they're offering their own 150 million shares, it seems that they cannot wait to get rid or dilute their holdings. Hmm...

Local supermarket chain Sheng Siong is offering a juicy incentive to investors who sign up for its initial public offering (IPO), which was launched today.

Singapore's second-largest grocery chain will distribute as dividends up to 90 per cent of net profit after tax in FY2011 and FY2012.

The family-run firm has priced its Singapore initial public offering at $0.33 per share, according to a prospectus filed with the Monetary Authority of Singapore on Thursday.

It will offer 351.5 million shares - 201.5 million new shares and about 150 million vendor shares - and is expected to raise $62.6 million in net proceeds.

Of this, about 15 million will be available to retail investors in the public tranche, while the remaining 336.5 million shares will be sold to larger, institutional investors via share placements.

The Lim brothers from the firm's founding family - Hock Chee, Hock Eng and Hock Leng - will receive about $48.2 million as they pare down their stakes during the listing.

The public offer opened at 9am today and will close at noon on Aug 15.

The chain, which has 24 stores throughout Singapore, reported revenue of $628.4 million last year with net profit of $42.6 million. OCBC Bank is the issue manager, underwriter and the placement agent. It said proceeds from the IPO will go towards repaying debt, the development and expansion of its grocery business both in Singapore and overseas, and for working capital.

From Asiaone, "Sheng Siong woos IPO investors with 90% dividend".


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