Ron Sim eyes IPO for V3 Group
Osim founder applies to relist on Hong Kong Stock Exchange
Osim founder Ron Sim is gunning for an initial public offering (IPO) in Hong Kong just months after bidding goodbye to the Singapore Exchange (SGX).
Mr Sim has applied to relist his massage chair and lifestyle products company as V3 Group, according to its application proof lodged with the Hong Kong Stock Exchange on Wednesday.
Osim was delisted from the SGX on Aug 29 after Mr Sim launched a takeover offer in March last year via his vehicle, Vision Three.
His final offer price valued the company at $1 billion. V3's IPO has not been priced yet.
Part of the IPO proceeds will be used to pay down outstanding loans of $321.9 million as at Dec 31 last year, which were used to finance the purchase of shares in Osim for the delisting.
The IPO funds will also finance new store openings and acquisitions such as the purchase of an up to 75 per cent equity stake in Futuristic, a Singapore-based manufacturer of store fixtures for some of the world's leading retail brands.
V3 expects to complete the acquisition of Futuristic before the IPO.
Mr Sim's speedy pivot to Hong Kong is no surprise. The entrepreneur has been an outspoken critic of the rising compliance costs faced by Singapore-listed companies.
Though he declined to comment yesterday beyond what was written in V3's preliminary prospectus, he told The Business Times last year that sustainability reporting is "overkill" and that "quarterly reporting destroys company value".
In Hong Kong, quarterly reporting is compulsory only for firms listed on the junior board.
Mr Sim has also objected to the principle that good governance requires separation of the chairman and chief executive roles. He is the chairman and chief executive of V3.
Some market observers called Mr Sim's defection to Hong Kong a slap in the face for Singapore.
But Osim's former investors cannot be too disappointed - the company's performance here was laudable. It grew from a price to earnings ratio of 13 times at its trading debut in 2000 to about 20 times last year.
SGX chief regulatory officer Tan Boon Gin said: "We continually engage the industry to find ways to strike the right balance between high regulatory standards and the cost of compliance and, if there is scope to review our approach, such as in the area of quarterly reporting, we will do so."
V3 describes itself as an Asian luxury group in the lifestyle and wellness markets. It has two luxury lifestyle brands, Osim and TWG Tea. V3's net profit for 2016 was $52.4 million, up 5.2 per cent from 2015 despite a 6.8 per cent drop in revenue to $577.6 million.
Revenue from Osim stores operated by the company in the Greater China region contributed to 45 per cent of group revenue.
Credit Suisse, Bank of China International and Jeffries are the joint sponsors for V3's IPO.