PENANG theme park developer Sim Leisure Group (SLG) made its Catalist debut on the Singapore bourse on Friday, opening at S$0.17 - 22.7 per cent lower than its initial public offering (IPO) price of S$0.22 per share.
One market observer noted that this could be due to a lack of interest in the market, or that the company's valuation was too high.
The counter closed at S$0.169 for a first day drop of 23.2 per cent, with 3.3 million shares changing hands.
SLG on Thursday placed out 26.4 million shares at S$0.22 apiece to raise a total of S$5.81 million.
The bulk of its IPO proceeds, or S$5.6 million, will be used to fully redeem outstanding preference shares held by state government entity Penang Development Corp, the group said.
The IPO placed about one-fifth of the company in public hands, while Sim Leisure Group founder and chief executive Sim Choo Kheng and his spouse Silviya Georgieva will hold a combined 78.4 per cent stake.
In response to a query from The Business Times on Thursday, SLG said it had from the outset prioritised redeeming its outstanding redeemable convertible preference shares held by Penang Development Corp with the IPO proceeds, stating this order of priority in its preliminary prospectus.
"In view that the total gross proceeds is approximately S$5.81 million, the use of proceeds was updated accordingly, and none of the gross proceeds from the placement would go towards expansion and working capital purposes," SLG said.
The group runs two theme parks in Penang - Escape Adventureplay and Escape Waterplay - with a third set to open in the first half of this year.
SLG also has plans to expand into China and South-east Asia, with Bangkok, Jakarta, Manila and Ho Chi Minh City named as potential sites.
Based on its closing share price, the company's market capitalisation is S$22.7 million.