Trans-cab takes second stab at listing on SGX

Singapore

AN initial public offering (IPO) is on taxi operator Trans-cab Holdings' New Year's resolutions list.

The home-grown family business lodged a preliminary offer document with the Singapore Exchange on Friday to potentially list its shares on Catalist in 2020.

This will be its second stab at going public, half a decade after aborting the first attempt.

The preliminary offer document did not disclose the offer price, expected valuation or total proceeds to be raised. In September, Bloomberg reported that Trans-cab would seek a valuation of up to S$200 million.

Singapore's second-largest taxi operator's core business is in acquiring taxis and renting them out to licensed taxi drivers in Singapore. The company also ventured into vehicle leasing services this June and hire-purchase financing in September.

In Friday's offer document, Trans-cab said it plans to expand its taxi and rental vehicle fleets, as it expects demand to increase for peer-to-peer passenger transport services. It intends to offer a wider range of taxis such as the Toyota Prius, and to continue acquiring petrol-electric hybrid vehicles.

As at Dec 16, the firm had committed to purchase five Toyota Alphard taxis, which will be delivered by end-2019, and 1,000 Toyota Prius taxis to be delivered over 12 months starting from February 2020.

The firm will also expand the hire-purchase financing business, and construct new diesel and petrol pump stations in Singapore.

In addition, Trans-cab may pursue growth through acquisitions, joint ventures and/or strategic alliances, whether in Singapore or overseas, according to Friday's document.

"We intend to continue our collaboration with ride-hailing firms Ryde Technologies and Velox Digital Singapore (Gojek) in respect of our taxis and rental vehicles respectively," Trans-cab said in the document.

As at Dec 27, the issued and paid-up share capital of the company is S$51.8 million comprising some 304 million ordinary shares.

For the six months ended June 30, 2019, the group reported S$6.1 million in profit net of tax and total comprehensive income, a 74 per cent surge from S$3.5 million a year ago in H1 2018, thanks to a decrease in cost of sales.

Earnings per share for the half year stood at 2.01 Singapore cents, up from 1.14 cents for the corresponding period in 2018.

Revenue shrank 13 per cent to S$61.4 million for H1 2019, from S$70.6 million for the year-ago period, weighed down by lower contributions from the taxi rental and automotive engineering segments.

Net cash flows generated from operating activities rose almost one-quarter to S$32 million for the six months to June 30, from S$25.7 million a year ago.

United Overseas Bank will be the sponsor, issue manager, underwriter and placement agent for this IPO.

The revived IPO plan came after the S$100 million potential debut in 2014 skidded to a halt on the eve of the offer's close. Trans-cab's insurer, First Capital Insurance, had surprised the firm with a yet-to-be invoiced additional insurance premium of about S$1.83 million. The 2014 offering was priced at S$0.68 per share, at the top end of its indicative range. That woud have valued Trans-cab at S$456 million. DBS Bank was the sole issue manager, bookrunner and underwriter.

As at Oct 31, Trans-cab had the second-largest taxi fleet in Singapore with 2,910 vehicles, about one-third of market leader ComfortDelGro's 8,344 taxis, according to data from the Land Transport Authority. Trans-cab also had 60 rental vehicles under its new leasing business as at Oct 31.