Frencken proposes S$100 million placement to fund expansion, potential M&A

[SINGAPORE] Tech solutions provider Frencken on Thursday (Aug 27) announced that it plans to raise S$100 million through a proposed placement of 44.1 million shares at S$2.2687 each.

The proposed placement share price is a 10 per cent discount against its Aug 25 volume-weighted average price of S$2.5207, said the group.

The placement shares represent about 10.3 per cent of the existing issued shares as at Thursday; the new shares will represent 9.3 per cent of the enlarged number of issued shares following the completion of the placement.

Frencken – which manufactures high-precision components, modules and complete sub-systems for multinational companies – noted that the amount raised from the placement will go towards supporting the execution of the group’s business expansion.

These include investments to strengthen the group’s manufacturing capacity and the capacities of its mechatronics and advanced plastic solutions business divisions.

The mechatronics division, which includes the group semiconductor business, accounted for most of the group’s H1 FY2026 revenue. The division’s revenue for the half year was S$383.4 million – 90.1 per cent of the group’s revenue at S$427.8 million.

Frencken also said the amount raised would strengthen the group’s financial position to give it “greater capability and flexibility to seize opportunities” for strategic investments, mergers and acquisitions, joint ventures, strategic alliances, as well as other growth opportunities in a timely manner.

This is part of the group’s strategy to add new business engines and drive long-term sustainable growth.

Ninety per cent of the proceeds of the share placement – S$87.4 million after deducting fees – will cover the costs of business expansion and strengthen Frencken’s financial position.

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The remaining 10 per cent, or roughly S$9.7 million after deducting fees, will be used as working capital requirements or may be used to repay bank borrowings, or both.

At Jun 30, Frencken had cash and cash-equivalents of S$123 million with S$53.2 million in borrowings.

In its H1 FY2026 results, Frencken noted that it aims to exceed S$1 billion in annual revenue, barring unforeseen circumstances.

The share placement is expected to be completed on Sep 3.

Shares of Frencken had closed at S$2.54 on Tuesday; the company asked for a trading halt on Wednesday morning, ahead of the market open.

In the year to date, prices of Frencken have risen 78.9 per cent.