DLF Holdings, a mechanical and electrical engineering services firm, on Tuesday said it plans to raise about S$2.9 million in net proceeds from its initial public offering (IPO), with its shares to be listed on the Catalist board.
The gross proceeds - that is, proceeds before associated costs such as management fees for the IPO are stripped out - stand at about S$4.26 million. The IPO will be done through a placement of 18.5 million placement shares at S$0.23 apiece.
In a media statement, DLF said it operates mainly as a sub-contractor for its project management services. These would include work for plumbing and sanitary systems, as well as ventilation and air-conditioning systems.
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DLF can also take on the role as the main contractor for turnkey contracting services. In such cases, the group acts as the main contractor to oversee the construction projects of new buildings, as well as the refurbishment and upgrading of other existing buildings.
The group has completed several projects in Singapore and the Maldives in recent years, including work for the Sengkang General and Community Hospital, and for the five-star InterContinental Hotel in the Maldives.
DLF intends to use part of the proceeds to seek out mergers and acquisitions, joint ventures and strategic alliances.
DLF's CEO Wong Ming Kwong said in a media statement: "Our listing on the Singapore Exchange will help us to expand our business and elevate our company profile. In addition to organic growth through securing more projects, we will also be looking at M&A opportunities to increase our scale and scope."
In its prospectus, DLF said its order book for its project management services and turnkey contracting services stood at about S$2.6 million and about S$3.8 million respectively. These orders would translate into revenues for the group over the next one to three years upon project execution, DLF added.
For the fiscal year ended Dec 31, 2017, DLF's revenue was up 15 per cent to S$21.5 million from the year-ago period. This was mainly due to an increase in sales from its turnkey contracting services segment, partially offset by the decrease in revenue of its project management services business.
Net profit for FY2017 stood at S$3.4 million, a 72 per cent increase from FY2016, as a fall in expenses and a higher profit margin helped to lift the bottom line.
The placement will close at noon on July 23. Trading of the company's shares on the Catalist board is expected to begin at 9am on July 25.
PrimePartners Corporate Finance is the sponsor, issue manager and placement agent to the company.