3 Things You Should Know About the Initial Public Offering of United Global Limited

After the successful initial public offering of Frasers Logistics and Industrial Trust (SGX: BUOU) in late June, there are two more IPOs in Singapore lined up for the month of July thus far.

One of the companies that wants to list in the public market is United Global Limited. Here are three things investors may want to know about the company:

1) A simple and easy-to-understand business

United Global has two main business segments. The company manufactures lubricants for automotive, industrial, and marine applications. These lubricants are made under United Global’s own brands or under third-party brands.

To complement its manufacturing business, United Global also trades base oils, additives, and lubricants. The company supplies these products to more than 30 countries.

Indonesia and Greater China are United Global’s most important markets; they collectively account for 53% of the firm’s total revenue in 2015.

2) Funds to be raised

The company’s IPO will see it issue 42.8 million new shares of itself to select investors at a price of S$0.25 each. The private placement will see United Global raise S$10.7 million in gross receipts. Apart from the S$1.5 million in estimated expenses for the IPO, the lubricant specialist plans to utilise the rest of the cash for expansion purposes and general working capital.

3) Future growth drivers

The company is planning to look at acquisition targets as a way to grow its business. It may also explore other forms of investments such as joint ventures or strategic alliances to diversify its business to other segments that might provide synergies with its lubricant-manufacturing arm.

United Global may also expand into new geographical markets. At the current moment, the company is looking at opportunities in Myanmar and Bangladesh.

United Global is closing the application for its placement shares by noon tomorrow (5 July 2016). The company’s shares are expected to start trading on 8 July 2016. Based on its listing price of S$0.25 per share, the company will have a market value of S$70.7 million when it lists.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore writer Stanley Lim doesn’t own shares in any companies mentioned.