Oiltek shares close 13% above IPO price on debut

THE counter of Oiltek International rose as much as 23.9 per cent above its initial public offering (IPO) price of S$0.23 per share as the solutions provider in the oils and fats industry made its trading debut on the Singapore Exchange's Catalist board on Thursday (March 3).

Its shares traded as high as S$0.285 in the first 10 minutes before losing some steam, inching down to trade between S$0.255 and S$0.265 for the rest of the session.

The counter eventually closed 13 per cent above the IPO price at S$0.26, with some 29.5 million shares changing hands, placing it among the day's top 15 most active counters on the bourse.

Last month, Oiltek announced that it will be spun off from Catalist-listed engineering services company Koh Brothers Eco Engineering (KBEE Group) following its listing, although KBEE Group was still expected to retain 67.4 per cent interest in the company.

Oiltek also said the IPO was expected to raise gross proceeds of S$5.2 million and net proceeds of S$3.6 million, excluding estimated listing expenses.

Of the net proceeds, 72.5 per cent are earmarked for working capital to expand Oiltek's business operations through securing more projects and projects of a larger scale. The rest will go towards the expansion of its business through investments, mergers and acquisitions, joint ventures and strategic alliances.

Oiltek currently does not have a dividend policy, but the board intends to recommend and distribute dividends of not less than 40 per cent of its net profit attributable to shareholders of the company for FY2022 and FY2023. This is to reward shareholders for participating in Oiltek's growth, it had said.