Shares of Econ Healthcare close 3.6% higher than its IPO price on Catalist relisting

PRIVATE nursing home operator Econ Healthcare closed 3.6 per cent higher than its initial public offering price (IPO) of S$0.28 upon relisting on the Catalist board of the Singapore Exchange on Monday.

The stock ended the day at S$0.29, with some 16.6 million shares changing hands throughout the course of the day.

Econ Healthcare also announced that it has expanded its services into China with the establishment of Chongqing Nursing Home. This is expected to commence operations in 2021, the group said.

Ong Chu Poh, founder, executive chairman and group chief executive officer of Econ Healthcare, said the group sees "attractive" opportunities for growth in the Singapore, Malaysia and China markets.

"These markets present attractive opportunities for growth as they benefit from affluent and rapidly ageing populations outpacing population growth, as well as an increasing demand for quality eldercare services, underpinned by supportive government policies," he noted.

Last Friday, the company said that it has received applications from investors for 86.9 times the number of shares available in the public portion of its IPO. With 1.8 million shares available to the public for subscription, it received 3,371 valid applications for around 156.5 million shares, with application monies received amounting to some S$43.8 million.

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It added that all 48.2 million shares available by way of placement were validly subscribed for. Application monies received for the placement shares amounted to approximately S$13.5 million. The overall IPO of 50 million shares at 28 cents apiece was 4.1 times subscribed.

Based on the offer price and the post-offer share capital of 257 million shares, Econ Healthcare's market capitalisation upon listing will be around S$72 million.

Econ Healthcare intends to use the net proceeds of around S$11.5 million for its expansion plans in Singapore and overseas. These include joint ventures, strategic collaborations, mergers and acquisitions, or investments. It also plans to upgrade existing facilities and channel the proceeds towards general corporate and working capital purposes.

DBS is the sponsor, issue manager, underwriter and placement agent for the offering.

Mohamed Nasser Ismail, global head of equity capital markets at SGX, said: "Over the years, Econ Healthcare has strengthened its management and track record, and has built up a resilient business model that is well positioned to support the growing ageing populations in Singapore and the region."