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Koufu plans S$85m IPO in July

HOMEGROWN food court operator Koufu has lodged a draft prospectus for a listing on the Singapore Exchange main board, with plans to start trading on July 18.

The initial public offering (IPO) could raise around S$85 million, and Koufu Group would have a market capitalisation of around S$350 million upon its debut, according to indicative terms seen by The Business Times.

These figures were not included in the preliminary prospectus lodged on Thursday.

Koufu was founded by executive chairman and chief executive officer Pang Lim in 2002, who began working straight out of primary school at the age of 13.

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Mr Pang became a small-time kopitiam owner in 1990, sharing the rent with his younger brother and uncle. They managed the drinks stall together and rented the other stalls out.

Mr Pang called his coffee shop business Aik Hua, but sold off this business in 2002, before unveiling Koufu. His wife and executive director, Ng Hoon Tien, is a co-founder.

Today, Koufu manages 47 food courts, 14 coffee shops, one hawker centre as well as a mall, Punggol Plaza in Singapore.

It also has one food court in Macau. Plans are underway to open a Koufu food court at Sengkang General and Community Hospital, and a Supertea F&B kiosk at Marina Bay Sands in July.

Koufu’s net profit last year was S$26.8 million, up 3.8 per cent from 2016. Revenue was steady at S$216.7 million.

Although it has no fixed dividend policy, Koufu intends to recommend dividends of at least 50 per cent of net profit after tax generated in 2018 and 2019. This will exclude an interim dividend of S$12.5 million that has already been paid by Koufu this year.

Koufu plans to use some S$40 million of the IPO proceeds to build an integrated facility to house a larger central kitchen. The rest will fund F&B outlet revamps and other expansion plans.

The IPO comprises an offering of new shares as well as a sale of vendor shares by Koufu's sole shareholder, Jun Yuan Holdings, which is controlled by Mr Pang and Mdm Ng. Mr Pang and Mdm Ng Hoon have agreed to a six-month lock-up period.

Koufu has three cornerstone investors – Maxi-Harvest Group, Qilin Asset Management and One Hill Investments, which is affiliated to the Ho Bee Group’s family investment management vehicle.

The cornerstone investors are not subject to any lock-up restrictions.

DBS is the sole issue manager, bookrunner and underwriter for the IPO. UOB is the co-manager and sub-underwriter.