Trans-cab launches IPO at S$0.68 a share
Singapore
THE phone of Trans-cab Holdings deputy chief executive Jean Teo rang near the end of a media lunch on Wednesday just hours before the taxi operator priced its S$114.2 million initial public offering at the high end of indications.
Her ringtone? None other than Money, money, money, the 1976 pop hit by Swedish quartet Abba.
The stock offering came at 68 Singapore cents apiece at the top end of an indicative range of 65 to 68 Singapore cents. That price will value the company at S$456 million upon listing.
Issue manager DBS has an over-allotment option for a further 20 million shares.
DBS managing director Cheah Le Sa said the deal received overwhelming demand, allowing the bookbuilding to end a day earlier than planned.
The offer comprises 153 million new shares and 15 million shares sold by Trans-cab chairman and chief executive Teo Kiang Ang and by existing shareholder Goh Seow Chai.
The bookrunners have allocated 65 million shares to cornerstone investors that include funds run by Eastspring Investments, Fidelity and Lion Global Investors. Another 94.2 million shares, including 6.35 million shares reserved for staff and associates, form the placement tranche. A further 8.8 million shares, or 5.2 per cent of the total offering, are allocated for the public.
The public offer closes at noon on Nov 18, with listing targeted for Nov 20.
The IPO price is about 12.6 times Trans-cab's 2013 earnings per share of 5.4 Singapore cents, based on its post-IPO share capital of about 670.8 million shares.
The company reported a net profit of S$19.9 million for the half-year ended June 2014. It intends to pay at least 15 per cent of FY2014 post-tax profit and at least 60 per cent of FY2015 post-tax profit as dividends.
Net proceeds of about S$97.8 million will be used to fund expansion of taxi operations, diversification into other transport businesses, working capital, investment in technology and construction of new headquarters.
Trans-cab CEO Teo said that he is keen to expand into vehicle leasing, be it car rentals or commercial vehicles. Those businesses can benefit from economies of scale from Trans-cab's taxi business, and yet are relatively unexposed to the regulatory risks of the cab operations.
Trans-cab operates Singapore's second-largest fleet of taxis, with 4,686 vehicles plying the streets.
DBS Bank is the sole issue manager, bookrunner and underwriter for the IPO.
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