SINGAPORE (Apr 12): Asian Healthcare Specialists, a group of five orthopaedic specialists operating four The Orthopaedic Centre clinics in Singapore, has launched its initial public offering (IPO).

The group is offering 46.9 million new shares for subscription by way of placement, at an issue price of 23 cents apiece, to raise a total of $10.79 million.

The placement exercise will be made available to retail and institutional investors in Singapore. There will not be a public tranche.

The net proceeds will amount to approximately $9.5 million.

AHS says some $8.5 million will be used for business expansion plans including organic expansion, and mergers and acquisitions, while the remaining $1 million will be used for general working capital.

The group also plans to establish a pain management centre, to complement its existing range of services in relation to the musculoskeletal group.

AHS is primarily engaged in the provision of a comprehensive range of orthopaedic, trauma and sports services – both surgical and non-surgical.

Common medical problems treated by the group include fractures, torn ligaments, compressed nerves, “slipped discs”, and sports injuries such as golfer’s elbow.

For the FY17 ended September, AHS posted earnings of $438,000 on the back of revenue of $11.0 million.

See: Orthopaedic group Asian Healthcare Specialists eyes Catalist IPO

AHS says it operates on an asset-light, strong cash flow business model, which allows the group to keep capital expenditure low and generate recurring cash flows. It adds that this can help fund its future expansion plans as well as be used for dividend payments.

To reward shareholders for participating in the group’s growth, AHS says it intends to recommend a dividend of not less than 50% of its earnings as dividends for FY18 and FY19.

“This IPO marks a major milestone for the group as we work towards our goal of giving movement, quality and life to years. To us, patient care comes first,” says Dr Chin Pak Lin, AHS’s executive chairman and CEO.

“This next step in our progression as a group, brings us closer towards our dream of forming a musculoskeletal centre, to provide a more complete care for a patient that comes to see an orthopaedist. When we take care of our patients, they will take care of us,” he adds.

Trading in AHS’s shares on the SGX Catalist board is expected to commence at 9am on Apr 20, 2018.