Mun Siong Engineering to launch IPO in SGX

The company eyes to raise $21.4mln from the listing by offering 107 new shares.

Mun Siong Engineering Limited (“Mun Siong”), a leading integrated mechanical engineering and electrical and instrumentation services provider for the Process Industries, including the oil and gas industry, will launch its initial public offering (“IPO”) on Monday, 18 October 2010, in conjunction with its proposed listing on the Mainboard of the Singapore Exchange Securities Trading Limited (“SGX-ST”).

The offering comprises 107 million new shares (“New Shares”) at 20 cents per New Share. Of these New Shares, 105 million are placement shares, with the remaining two million New Shares available for public subscription. Mun Siong hopes to raise gross proceeds of approximately $21.4 million from the listing, according to a Mun SIong report.

The New Shares to be issued represent approximately 25.7% of Mun Siong’s enlarged issued share capital after the IPO. Based on its earnings per share of approximately 2.61 cents for the financial year ended 31 December 2009, Mun Siong’s offering at 20 cents per New Share is priced at a historical price-earnings ratio of approximately 7.65 times.

Mun Siong intends to use part of the proceeds to establish a regional presence in markets such as India, Malaysia and Vietnam, from which it has received enquiries. In July 2010, the Company signed a memorandum of understanding with two other Singapore companies to form a consortium to bid for upcoming oil and gas projects in Vietnam.

Mun Siong also plans to widen its capabilities to include support services that complement its present offerings. The Company will also establish an engineering design centre and upgrade its existing database management system to support the new centre.

Commenting on the listing, Ms Cheng Woei Fen, Executive Chairman, said, “Having successfully rendered mechanical engineering and electrical & instrumentation services for two major projects, namely the Ethylene Cracker Complex Project and the Singapore Parallel Train Project, we are now ready to take on more such large-scale projects both locally and overseas. This listing will allow us to strengthen our balance sheet and place us in a better position to secure such projects.”

Mun Siong is engaged in the provision of mechanical engineering and electrical and instrumentation services to customers in the Process Industries. With its complete range of highly efficient specialised in-house services, the Company is able to undertake engineering projects (including Greenfield and Brownfield Construction projects), Routine Maintenance, Shutdown Works and major Turnaround projects. Having built long-standing business relationships of more than 35 years, its pool of major customers today includes Shell Petroleum, ExxonMobil, Yokogawa Engineering, Chiyoda Singapore, and Mitsubishi Heavy Industries.

Since the commencement of its operations in 1969, Mun Siong has established itself as a leading term service provider of maintenance works at major oil and gas plants in Singapore. The Company has built a track record of timely delivery and a history of quality workmanship, and has also achieved awards and customer certifications for its commitment towards safe operations, quality service, reliable turnaround, and consistency in meeting customers’ needs.

Mun Siong achieved a profit after tax of $8.1 million in FY2009. The Company’s revenue has grown more than twofold from $26.2 million in FY2007, to $67.7 million in FY2009.

On the Company’s prospects, Ms Cheng said, “We are buoyed by the continued growth in demand for petrol and petrochemical products. Building on our strengths and strategies, we are well-positioned to ride the wave of opportunities arising from this development.”

Mun Siong’s IPO will close at 12.00 noon on 20 October 2010. Trading of the Shares is expected to commence at 9.00 am on 22 October 2010. DMG & Partners Securities Pte Ltd is the Issue Manager, Underwriter and Placement Agent for the IPO.