Kim Heng (IPO)

Kim Heng: will be issuing 174m invitation shares, comprising 160m new shares and 14m vendor shares. 3m will be made available by public offer at $0.25 each, valuing the firm at $177.5m market cap. Key institutional investors include Credence Capital Fund II and Zana Asia Fund. The IPO will close at noon on Jan 20 with trading on Catalist to start on Jan 22. Kim Heng, which has been in the business for more than 40 years, is primarily engaged in two segments - shipbuilding, and providing offshore marine services and equipment. Its offshore services unit provides supply vessels and heavy-lift equipment, repairs vessels and builds sections of drilling rigs, among other operations. The shipbuilding business constructs new vessels and buys and refurbishes ships for sale. Kim Heng has two shipyards - at Pandan Crescent and Penjuru Road. Its customers include major offshore drilling contractors and support service providers such as Transocean, Seadrill and Noble Corporation. Kim Heng made a net profit of $8.03m in 1H13, down from $10.6m a year ago. It made a net profit of $17.3m in FY12 on revenue of $86.7m. Kim Heng intends to use ~$20m of the net proceeds of ~$36.4m to enhance its yard facilities and expand its vessel fleet. It may also spend $7m or so to expand and diversify its service offerings in the oil and gas industry. This could include M&A, JVs or strategic alliances. The remaining $9.4m will be kept for general working capital purposes