Trans-cab files preliminary document for next year's IPO comeback

SINGAPORE's second-largest taxi operator Trans-cab Holdings is taking a second stab at going public, half a decade after aborting its first attempt.

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

Bloomberg had reported in September that Trans-cab is aiming for a valuation of as much as S$200 million from the initial public offering (IPO), according to people with knowledge of the matter. The preliminary document on Friday had yet to disclose the expected proceeds to be raised or the invitation price per share.

Trans-cab's core business is in acquiring taxis and renting them out to licensed taxi drivers in Singapore. The company also recently ventured into leasing services and hire-purchase financing for vehicles.

In the preliminary document lodged on Friday, Trans-cab said it plans to expand its taxi and rental vehicle fleets, as it believes that demand for peer-to-peer passenger transport services is likely to increase. It intends to offer a wider range of taxis and continue acquiring petrol-electric hybrid vehicles.

The company 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.

Net asset value per share as at June 30 was 20.38 Singapore cents.

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

The revival of Trans-cab's IPO plan came after the company jammed the brakes on its much-anticipated S$100 million debut in 2014. Its insurer, First Capital Insurance, had surprised the taxi firm at the eleventh hour with a yet-to-be invoiced additional insurance premium of about S$1.83 million. The additional billings were not flagged in the prospectus, hence potentially rendering the investor document inaccurate.