Engineering group aims to raise $47m in IPO

A FIRM with a track record of two decades in piling and other ground works, at major construction sites in Singapore and now Vietnam, is breaking new ground of its own with a listing.

Ground engineering group Ryobi Kiso is launching its initial public offering (IPO) - and its directors have pledged to recommend paying at least 25 per cent of net profits this year as dividends.

Established in 1990, the group specialises in bored piling and prides itself as a pioneer in eco-friendly piling - offering state-of-the-art technology to ensure minimal vibration and noise.

It is offering 192 million new shares priced at 26 cents each. Of these, 190 million are to be sold to private institutions.

The other two million shares are being offered to the public.

Co-founder and chief executive Ong Tiong Siew said: 'We are very excited about our proposed listing on the Singapore Exchange mainboard as this marks the beginning of a new phase for Ryobi Kiso and serves as a launch pad for us to propel the group to our next phase of growth.'

The group expects to raise net proceeds of about $47 million, with about $7 million to be kept as working capital.

The rest will be spent mainly on Ryobi Kiso's expansion plans, which include the purchase and upgrading of equipment and machinery to help secure more projects.

It will also use $5 million of the proceeds to repay bank borrowing.

In July last year, the group expanded to Vietnam, where it has secured two projects in Hanoi and Ho Chi Minh City.

Locally, the group is also involved in several notable projects such as the Marina Coastal Expressway, MRT Downtown Line and Punggol Waterway.

Despite doing well, Mr Ong is keen to expand even further.

'We are confident that demand for our services will remain strong in both Singapore and Vietnam,' said Mr Ong.

'The funds generated from the IPO will allow us to expand our business operations and intensify our marketing efforts to meet this demand.'

Last year, Ryobi Kiso posted net profits of $34.6 million - more than treble the figure in 2007 - on revenue of $160.3 million.

The new shares are priced at a share price to earnings ratio of about 4.3 times. This is a commonly used measure of share valuation relative to profits.

The offer opens today at 9am and closes at noon next Monday.

The trading of the company's shares on the Singapore Exchange mainboard is expected to commence on Wednesday next week.

Source: Straits Times, 19 Jan 2010.