Mun Siong Engineering's IPO raises $18.9mln

Offering was 6.1 times subscribed as 7,227 valid applications were received for the 2mln shares.

Mun Siong Engineering Limited (“Mun Siong”), an integrated mechanical engineering and electrical and instrumentation services provider for the Process Industries, including the oil and gas industry, has garnered strong interest from institutional and retail investors for its initial public offering (“IPO”).

The offering comprised 107 million new shares (“New Shares”) priced at 20 cents each. Of these, 105 million shares were available by way of placement (“Placement Shares”), including 10 million shares reserved for Executive Directors, Independent Directors, management, employees, business associates and others who have contributed to the success of the Group (“Reserved Shares”), while two million shares were made available for public subscription (“Offer Shares”), as mention in a Mun Siong report.

At the close of the IPO at 12.00 noon on 20 October 2010, there were 7,227 valid applications received for the Offer Shares. In total, these applicants applied for an aggregate of 543.3 million Offer Shares, with application monies received amounting to approximately $108.7 million.

Based on the aggregate offering of 107 million New Shares and total valid applications received for approximately 648.3 million New Shares (comprising 543.3 million Offer Shares and 104.98 million Placement Shares), the IPO was approximately 6.1 times subscribed.

Said Ms Cheng Woei Fen, Executive Chairman of Mun Siong, “We are extremely heartened by the positive response from the investment community to our IPO. This is a vote of confidence in Mun Siong and its prospects. The listing is a critical Mun Siong Engineering Limited launch pad for us, as we look forward to executing our growth plans and extending our presence into the region.”

Out of the estimated net proceeds of $18.9 million raised from the IPO, Mun Siong intends to use approximately $12.5 million to widen the range of services available to its customers to include support services, which will complement its existing services. The Company plans to spend around $4 million of the net proceeds to establish a regional presence in markets such as India, Malaysia and Vietnam, where the Company has received numerous enquiries about its services. The Company also expects to use around $1 million of the net proceeds to establish an engineering design centre and upgrade its existing database management system to support the new centre. The remaining net proceeds will be used for general working capital requirements.

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 one of the leading term resident service providers of maintenance works at major oil and gas plants in Singapore. The Company has built a track record of timely delivery, a history of quality workmanship, consistency in meeting its customers’ needs and has also achieved awards and customer certifications for its commitment towards safe operations, quality service and reliable turnaround.

Trading of the Shares is expected to commence on a “ready” basis at 9.00 am on 22 October 2010. DMG & Partners Securities Pte Ltd is the Issue Manager, Underwriter and Placement Agent for the IPO.