Sheng Siong seeks up to S$141m in IPO: Sources | Sheng Siong Group, Singapore Exchange

Sheng Siong seeks up to S$141m in IPO: Sources | Sheng Siong Group, Singapore Exchange

Supermarket operator Sheng Siong Group aims to raise up to S$141 million via its initial public offering on the mainboard of the Singapore Exchange expected next month, people familiar with the deal told Dow Jones Newswires yesterday.

Sheng Siong is set to offer about 351 million shares at an indicative price range of S$0.36 to S$0.40 apiece, the sources said. The offer comprises about 201 million new shares and about 150 million vendor shares.

Sheng Siong last month filed a preliminary prospectus with the Monetary Authority of Singapore, but did not provide details about the size or timing of the offering.

The group, which operates 24 retail outlets throughout Singapore, reported revenue of S$628.4 million last year.

OCBC Bank is the issue manager, underwriter and the placement agent.

According to the draft prospectus, unaudited pro-forma net earnings per share of Sheng Siong for its 2011 financial year based on the pre-invitation share capital of 1,140 million shares is 3.74 Singapore cents.

Sheng Siong said in the draft prospectus it will use the proceeds mainly to repay debt, develop and expand its grocery business and operations in Singapore and overseas, and for working capital. Read More

Sheng Siong launches IPO at S$0.33 per share | Sheng Siong launched its initial public offering (IPO)

Sheng Siong launches IPO at S$0.33 per share | Sheng Siong launched its initial public offering (IPO)

Homegrown supermarket chain operator Sheng Siong launched its initial public offering (IPO) on Friday.

However, analysts are not too upbeat on the prospects of the stock as growth potential may be limited.

The family-run business has priced its shares at 33 cents apiece and plans to raise S$116 million from the share sale.

It is selling a total of about 351.5 million shares, comprising 201.5 million new shares and 150 million vendor shares.

The firm's three founders - brothers Lim Hock Chee, Lim Hock Eng and Lim Hock Leng - will receive S$48.3 million from the sale of their stakes while the issue of new shares will net S$62.6 million.

Post-listing, the firm is expected to have a market capitalisation of S$442.7 million.

Sheng Siong posted a net profit of S$42.6 million and revenues of S$628.4 million for the fiscal year ended December 2010.

Sheng Siong said it intends to pay out up to 90 per cent of its net profit for this year and 2012 as dividends.

Still, analysts are sceptical on the stock as they see limited growth potential.

Ng Kian Teck, investment analyst at SIAS Research, said: "A bulk of their IPO proceeds is actually used to pay off loans as well as to build up their warehouse facilities, which actually helps in terms of the cost management, but not so much of the top-line strategy."

The public offer will close on August 15 and its shares are expected to start trading on August 17. Read More