Trans-Cab pulls brakes on IPO on eve of offer closing

Singapore

TRANS-CAB Holdings' initial public offering (IPO) plans have skidded to a halt, with the company having received new information pertaining to its insurance premium.

In a statement on Monday night, the company said it was previously unaware of an additional insurance premium of S$1.83 million (inclusive of GST) it had to pay, but which had not yet been invoiced by the insurer.

When fleet owners negotiate their premium with their insurance providers, they negotiate for the minimum premium, which they pay in full.

At the same time, a premium adjustment rendered by the insurer, based on cumulative accident claims against the company's taxi fleet, will be recommended by the insurer.

The amount of S$1.83 million is thus a preliminary estimate provided by the insurer and has not been reviewed and accepted by the Trans-Cab Holdings.

The company said: "In view of the impending close of the public offer at noon on Tuesday, and taking into account the time needed to evaluate this new information holistically with other insurance premium billings received in the second half of 2014 in the context of general-disclosure practices as well as the procedures necessary to make available such information, there would be timing constraints."

The Business Times understands that Trans-Cab learnt of the additional premium on Nov 14, and was thus unable to put up a supplemental prospectus with the updated numbers on time.

The company, which runs the second-largest fleet of taxis in Singapore, had put up 153 million new shares and 15 million shares sold by Trans-Cab chairman and chief executive Teo Kiang Ang and by existing shareholder Goh Seow Chai.

The stock offering was priced at 68 Singapore cents apiece, at the top end of its indicative range of 65 to 68 cents. The offering had received overwhelming demand, said DBS Bank, the sole issue manager, bookrunner and underwriter.

Trans-Cab's profit after tax for the financial year ended Dec 31, 2013 was S$36.3 million. For the half-year ended June 2014, the company reported a net profit of S$19.9 million.

It said that since its fiscal year ends on Dec 31, it intends to complete its full-year audit, review the situation and evaluate its options thereafter.

The full amount of the application monies will be returned or refunded to the applicants within three market days of the discontinuation of the offering.