Eindec Corporation Limited, a regional clean air environmental and technological solutions provider, has successfully completed its placement of 35,800,000 shares. As at the close of the placement at 12.00 noon on 13 January 2016, all placement shares were validly subscribed for.
Application monies received amounted to a total of approximately S$7.5 million (US$5.21 million) from its initial public offering (IPO). This exceed their projection of US$5.19 million in proceeds from their IPO.
Commenting on the successful completion of the Placement, Paul Chia, the Eindec Group’s executive director and CEO said, “We are heartened by the support we received for our initial public offering.”
Chia added, “The successful completion of our IPO represents another strategic milestone in our Group’s operating history since 1984, and will provide us with the branding and funds to embark on the next phase of our growth with the establishment of our new environmental and technological solutions products business.”
UOB Kay Hian Private Limited was the issue manager, sponsor, and placement Agent for the IPO. The first IPO for the year on the Singapore bourse, this compares to 13 firms conducting their IPO in 2015. A 57 per cent decrease in volume from 2014, most of these were on the Catalist secondary board, with the only mainboard IPO being BHG Retail Real Estate.
An estimated S$4.6 million from the net proceeds will be deployed to finance Eindec’s new business for environmental and technologies solution products in China, investment in R&D for new and existing products, as well as enhancing manufacturing capabilities and for working capital purposes.
With the IPO,The company has a market capitalisation of S$22.6 million, with the Chinese property developer Weiye maintaining its 66.8 per cent stake post-placement. From 15 January 2015, Eindec will commence trading on the Catalist Board.
While past reports have noted the robust prospects for the air purifier market, Eindec is raising funds for entry into what is a highly competitive market that is facing a slump, according to the Financial Times. According to their report, declining sales, combined with a surge of entrants, have reduced the ability to generate strong revenue.
This has coincided with a market slump as the air quality in many mainland Chinese cities has improved in quality through 2015. Citing Airgle, a US firm targeting the high-end purifier market, the Financial Times noted a decrease of between 10 to 20 per cent in sales for 2015. Airgle attributed this to increased competition.