SINGAPORE (June 14): PropNex Realty, Singapore’s largest real estate agency, has lodged its preliminary offer document with the Monetary Authority of Singapore for its Mainboard listing on the Singapore Exchange.

PropNex plans to raise about $40 million from the initial public offering (IPO), according to a June 1 Bloomberg report, citing people with knowledge of the matter. The company is also targeting a market capitalisation of as much as $250 million, Bloomberg said, adding that the IPO shares could be priced at 62-68 cents each.

See: PropNex Realty said to seek $40 mil from IPO launch

In its preliminary prospectus lodged on Thursday by issue manager UOB KayHian, PropNex’s IPO will comprise a private placement to institutional and other investors as well as a public offering.

Concurrently, cornerstone investors Affin Hwang Asset Management Berhad, FIL Investment Management (Hong Kong), Nikko Asset Management Asia, NTUC Income Insurance Co-Operative, Samsung Asset Management (HK) and Value Partners Hong Kong, have agreed to subscribe to a total of 50 million shares.

PropNex said proceeds for the listing will be used to fund local and regional expansion through mergers and acquisitions, joint ventures and partnerships strategy. The funds will also be used to enhancement its real-estate brokerage business, expansion its range of business services, enhance its technological capabilities and for working capital purposes.

According to the prospectus, PropNex reported FY15, FY16 and FY17 earnings of $6.5 million, $7.6 million and $16.3 million respectively. These came on the back of revenues of $204.8 million, $245 million and $361.3 million respectively.

Although PropNex has no fixed dividend policy, the board plans to recommend and distribute dividends of at least 50% of its earnings for the period from the listing date to Dec 31, 2018 and in FY2019.

The number of agents under PropNex swelled to nearly 7,000 agents last year after a merger with Dennis Wee Group. However, none of the proceeds from the offering will be used to pay the $5 million merger deal, according to the prospectus.

APAC Realty, a competitor of PropNex, managed to raise $58 million in a listing last year.

Year to date, APAC Realty shares are down 9% to 81 cents, compared to a 2.2% drop in the benchmark Straits Times Index.