OSK Ventures IPO poised to be largest for Mesdaq -
[Cached Version]
Published on: 6/3/2004
Last Visited: 6/3/2004
Eddie Yap
OSK Ventures International Bhd's (OSKVI) planned flotation on the Mesdaq market by the third quarter this year could be the largest initial public offering (IPO) to date, in terms of proceeds raised, said chief operating officer Eddie Yap.
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Yap said the company had on May 18 obtained approval for the listing from the Securities Commission and Mesdaq.
"Approval still has to be obtained from the shareholders of OSKH at an EGM set for June 18," he said, adding that the circular on the flotation would be sent to shareholders today.
Yap said that of the 675 million IPO shares, 50 million each would be reserved for shareholders of OSKH and eligible directors and employees of OSKH group and people who had contributed to the success of OSKVI.
"Twenty-five million will be for public issue and the balance 550 million for private placement to institutional investors as well as other private investors," he said.
Post-IPO, OSKH's stake in OSKVI will be diluted to 55% from 100%.OSKVI will be the holding company for three wholly owned subsidiaries: OSK Venture Equities Sdn Bhd, OSK Technology Ventures Sdn Bhd, and OSK Private Equity Management Sdn Bhd.
Asked about the likely response to OSKVI's offering, Yap said he was confident it would be well received.
"The company has much growth potential, a proven record, and the backing of the established OSK brand," he said, adding that OSKVI had about 18 firms in its portfolio.
Of the total, Yap said, four were listed on Mesdaq and six more would be ready for listing within a year.
"All the IPOs had good success rates, being oversubscribed and well-received by investors," he said, citing eBworx Bhd and Nova MSC Bhd.
According to Yap, a team puts all OSKVI investments through a rigorous due diligence process covering among other things, the technical, legal and financial aspects of the companies to be invested in.
OSKVI's profit after tax jumped to RM4.3mil for the year ended Dec 31, 2003, from RM100,000 in 2002, while revenue rose 2.3 times to RM5.8mil from RM2.5mil.
According to Yap, unrealised profits totalled RM15mil at Dec 31, 2003.
Yap said OSKVI expected to turn in a better performance this year compared with 2003, as its listing would generate additional funds for new investments, and new IPOs in the pipeline would also enable the company to realise some returns.
He said the company had been achieving an internal rate of return of 25% yearly and hoped to maintain or even exceed the figure this year.
"The three main income generators for OSKVI are profits from the sale of investments, which contribute about 90%, returns on investments in the form of dividends, and advisory/management fees," he said, adding that OSKVI, which was established in 2000, currently contributed 8%-10% to OSKH's net profits.
Yap said the prospects for the company were good as the venture capital industry was still in the development stage and had much growth potential.
Besides investing in advanced manufacturing and information and communications technology (ICT) sectors, Yap said the company had also started putting money in the biotechnology and life sciences sector last year and currently had two biotech companies in its portfolio.