SGX-bound Federal Int'l plans Thai, Houston offices
(2000-08-18)

SGX-bound Federal Int'l plans Thai, Houston offices

Oil, gas equipment distributor expected to launch IPO within a month OIL and gas equipment distributor Federal International (2000), which is expected to launch its initial public offer within a month, will use the funds raised for expansion.

"Without public funds we can't grow faster," Federal's chairman and chief executive Koh Kian Kiong said in an interview this week.

It will apply 43 per cent of the IPO proceeds to service bank borrowings and growth plans. Another 38 per cent will help boost efficiency and cut costs in Singapore.

A further 13 per cent, or just over $1 million, will be used to set up representative offices in Thailand and Houston.

Mr Koh is confident Federal's listing will not be affected by the deluge of IPOs in the market. He said the group had a 25-year track record of profitability and had survived three recessions including the Asian financial crisis.

Its main business is distributing flow-line control products to the oil and gas industries. Sales of valves and pipe fittings accounted for 81.3 per cent of group turnover in 1999.

The group also distributes drilling equipment for use on onshore and offshore rigs, and fire protection and detection systems. Last year, Federal diversified into IT services and has already secured $1 million of IT networking contracts in Singapore.

Federal is looking to go beyond its role as an agent. Mr Koh said it aimed to acquire a fabrication yard so it could supply complete flow-line systems in the Asean region.

It posted a pre-tax profit of $8.25 million on turnover of $80.3 million in 1999. Profit and revenue were $2.88 million and $48 million the previous year.

The issue is managed by UOB Asia and underwritten by United Overseas Bank.

  
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