Singapore: Abu Dhabi-Singapore fintech pact; Pacific Radiance loans; HRnetGroup IPO

View of Singapore's central business district

Abu Dhabi and Singapore have formed a fintech partnership, offshore and marine company Pacific Radiance has secured S$85 million in loans and HRNetGroup’s IPO will close on 14 June, with the company starting to trade on the SGX on 16 June.

Abu Dhabi-Singapore fintech pact

Abu Dhabi and Singapore have established a fintech bridge that links the Middle East (i.e. Western Asia) with other Asian markets as part of the former’s economic diversification plans.

Abu Dhabi’s special economic zone, the ADGM, which serves as its Dhabi’s financial centre, entered into a cooperation deal with the Monetary Authority of Singapore (MAS) that is intended to spur financial entrepreneurship through mutual exchanges of capital and human resources.

Abu Dhabi is the biggest of the seven emirates that form the United Arab Emirates (UAE) and accounts for about 90 per cent of oil production in the UAE. It is also a core member of the Organization of Petroleum Exporting Countries (OPEC).

Basing a business in the ADGM includes an allowance for full foreign ownership, no taxes for 50 years and no restrictions on repatriating profits. It currently accommodates around 340 banks and companies, including those from outside the financial sector.

The collaboration with Singapore is aimed at cultivating sectors besides oil, considering shifting developments in the Middle East.

In an interview with the Nikkei Asian Review, the CEO of its Financial Services Regulatory Authority, Richard Teng, observed that in the Middle East and North Africa, there is high demand for low-cost financial services, creating an opportunity for fintech startups keen to explore the region.

Pacific Radiance secures S$85m of loans

Pacific Radiance has secured S$85 million in loans under two government-backed financing schemes to help tide over the prolonged offshore and marine (O&M) industry downturn.

The schemes are the Internationalisation Finance Scheme (IFS) by International Enterprise (IE) Singapore and the Bridging Loan (BL) scheme by Spring SingaporeThe loan will help support the group’s working capital needs over the medium term. IFS was enhanced late last year to allow O&M companies to borrow up to S$70 million.

Pacific Radiance also managed to secure a maximum loan of S$15 million under the BL scheme. The Singapore government will underwrite 70 per cent of the risk share for both the IFS and BL loans.

According to Pacific Radiance, it accepted letters of offer and entered into a facility agreement with two of its principal bankers – United Overseas Bank (UOB) and DBS Bank.

Pacific Radiance executive chairman Pang Yoke Min said, “Even though vessel utilisation and charters rates are bottoming out, market conditions will remain challenging in the near term. To withstand the headwinds ahead, we will continue to refine our cost structure, extend our reach in key markets and work closely with our lenders to manage our working capital and loan repayments to sustain our business for the long term.”

HRnet Group IPO to close on 14 June

Local recruitment firm HRnetGroup has launched an initial public offer (IPO) on the SGX aiming to raise S$174.1 million by selling 193.4 million shares at an offer price of 90 cents per share. The IPO will close on 14 June, with public trading of its shares to commence on 16 June.

An estimated 85.7 million shares will be offered under the placement tranche while 3.8 million shares will be offered under a public tranche. This includes 440,800 shares reserved for the directors and employees of the company and its subsidiaries. About 103.9 million shares have been taken up by cornerstone investors including Aberdeen Asset Management Asia, Credit Suisse AG’s Singapore and Hong Kong branches, FIL Investment Management (Hong Kong), and TechnoPro Holdings.

Proceeds from the IPO will finance business expansion or potential opportunistic acquisitions. In FY16, revenue stood at $365 million while net profit came in at $48.4 million.

HRnetGroup claims to be the largest Asia-based recruitment agency in Asia Pacific ex-Japan.

Temasek’s investment arm Heliconia Capital had invested an undisclosed sum in HRnetGroup in February 2017.

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