Otto Marine has raised one of the largest IPOs this year. Despite the global financial crisis, the offshore marine group is selling 235 million shares at 51 cents each in a bid to raise $97.7 million in net proceeds.
“We look long term in our IPO, and in our business, we have strong growth prospects,” said Lee Kok Wah, Otto’s managing director.
With the IPO, which is the fourth largest listing this year, Otto is expecting to increase its market capitalisation to $602 million. The largest IPO was issued in June by Indiabulls Properties Investment Trust, which generated a market capitalisation of $2.4 billion.
Otto is offering one million shares to the public, and the remaining will be sold to international investors. Executive Chairman Yaw Chee said that the IPO would help the company improve its condition in the long run and take advantage of market opportunities when business climate improves. Around $43.4 million of the IPO will be allocated for the acquisition of vessels to be used in joint ventures, while $27.2 million will be used to expand charter fleet.
The net profit of Otto soared to $32.7 million – a 265% increase – for a five-month period ending May 2008, while revenues increased by 154% to around $220 million. Around 90% of the revenues and profits came from shipbuilding, but that could increase as the company plans to increase the profit share of its ship chartering business.