Resources Global debuts with 10% premium over IPO price
The Indonesian coal trading and shipping firm had offered 15m placement shares at S$0.20 each for a Catalist listing
Singapore
THE Singapore bourse on Friday saw its first trading debut of an initial public offering (IPO) for the year, with Resources Global Development (RGD) closing at S$0.22 on the Catalist board.
The closing price is 10 per cent above the IPO price of S$0.20. The counter had opened at S$0.21.
The Indonesian coal trading and shipping company issued 15 million placement shares to raise gross proceeds of some S$3 million and net proceeds of around S$1.6 million.
Net proceeds from the IPO will be used for general working capital purposes, according to the company's final offer document lodged on Jan 14.
Francis Lee, RGD chief executive, said: "We will tap our listing status to further augment our operations and footprint as we chart new growth."
The firm plans to expand its customer base and grow its range of sectors and geographical coverage, according to its chief financial officer Thomas Yeo. Listing on the Singapore Exchange (SGX) marks "the start of a strategic journey" for RGD, Mr Yeo added.
For fiscal 2018, the company posted a net profit of S$2.2 million, a surge of 86.4 per cent from S$1.2 million a year earlier. Revenue more than doubled to S$44.8 million, from S$19.2 million in FY2017.
Earnings per share prior to the placement stood at three Singapore cents for FY2018, up from 1.6 cents in the year prior.
RGD currently does not have a fixed dividend policy.
Before the IPO, the company's sole direct shareholder was Singapore-incorporated Deli International Resources. It now holds an 83.8 per cent stake in RGD after the placement.
Deli's shareholders are Arifin Tan and four siblings - Djunaidi Hardi, Juhadi, Limas Ananto and Arifin Ang. Mr Hardi is the father of RGD's executive director and chief operating officer, Salim Limanto.
ZICO Capital is the company's sponsor while UOB Kay Hian was the placement agent. Withers KhattarWong advised RGD on the IPO.
The Withers KhattarWong team's "keen understanding of Indonesian cross-border projects was especially helpful in providing astute solutions throughout the IPO process", Mr Yeo said.
RGD's coal trading business is conducted through its PT Deli Niaga Sejahtera subsidiary. Its supply of thermal coal for domestic sales is procured from thermal mines in South Kalimantan, Indonesia.
Its coal shipping services business, meanwhile, is carried out through its subsidiary PT Deli Pratama Angkutan Laut, covering shipping routes mainly between coal mines in South Kalimantan to the Java and Sulawesi islands in Indonesia.
According to RGD's final offer document, some key risks to the business include its operations being affected, unable to obtain, maintain or renew its licences, permits or approvals from the Indonesian authorities to carry out business.
The company is also exposed to market fluctuations in the demand and supply for coal, and there is no assurance that it may continue to maintain its shareholding and/or control over its operating subsidiaries.
RGD has a market capitalisation of about S$18 million. Following its listing, the total number of commodities companies on the Singapore bourse stands at 32, with a combined market cap of around S$42.5 billion, SGX said on Friday.
