Trans-cab boss Teo Kiang Ang blew over $1 million on the firm's aborted initial public offering (IPO), but has shrugged off the episode as a lesson learnt as he prepares for a comeback, likely in 2016.
Mr Teo, who built a taxi company second only to ComfortDelGro in fleet size in just 10 years, said: "It's a real pity that investors missed the opportunity to share in our success."
The Straits Times understands Trans-Cab, which has 4,700 taxis and a net margin of 22 per cent, is poised for record profits next year.
This would largely be on the back of higher rental arising from a renewed fleet.
In its IPO prospectus, Trans-Cab stated that it would pay no less than 15 per cent of its after-tax profit for the 2014 financial year, and no less than 60 per cent of its after-tax profit for the 2015 financial year.
Appearing sanguine about the failed float yesterday, Mr Teo said he is now focusing on the completion of his headquarters facility in Ang Mo Kio.
He bought the leasehold industrial plot near the SBS Transit and SMRT bus depots for around $61 million earlier this year, and is building his 36,000 sq m HQ which he hopes to complete by the third quarter of next year.
Mr Teo said he does not know who wrote the "poison pen" letter alerting the stock exchange to Trans-Cab's outstanding insurance premiums, which derailed his IPO plans. And he does not seem interested to find out.
For him, the IPO exercise was a learning experience. "There's always the theory, but you don't know what it's really like until you do it," he said.
Referring to the $1.83 million he owed First Capital, the 64-year-old Teochew businessman said: "For the past seven years, our auditors have been going through our accounts, and there has been no change in treatment."
He said Trans-Cab, with hindsight, could have made a provision for the premiums, which can vary according to actual claims filed and processed.
The amount is small, compared with the company's profits. Last year, Trans-Cab generated net earnings after tax of $36.3 million.
Mr Teo said the firm need not have gone through an IPO to raise funds. The business had a strong cash flow, and he had good credit ratings with the banks. But he was persuaded to float his company by one of his bankers because being listed would "raise our profile, especially internationally".
Without the pressures of being listed now, Mr Teo said he feels quite relieved, and is able to concentrate on building his business.
He is in talks with a foreign party to bid for the first bus-route parcel the Government is offering. However, he has not quite decided if he wants to go into the bus business just yet.
Right now, he is looking at higher-yield activities, such as vehicle leasing and property. He has been investing in commercial and industrial properties for more than 10 years.
As for an IPO comeback, Mr Teo said 2016 is a possibility. "But we'll have to plan it very carefully this time," he said.
This article was first published on Nov 29, 2014.
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