Factoring firm plans IPO

IFS Capital, a factoring and financing company, Plans to raise at least 200 million baht in an initial public offering next year.

Tan Ley Yen, the chief executive of IFS Capital (Thailand), said it would float 120 million shares at one baht par value in the IPO, representing 25.53% of paid-up capital after the offering.

Funds raised will be used for working capital and business expansion. The company submitted its regulatory filing for the offering yesterday.

“The IPO will allow us able to raise found at relatively low cost, helping to boost our overall competitiveness. We also want to raise our profile to boost our customer base,” Mr Tan said.

IFS Capital provides factoring services for both local and foreign trade receivables. It’s other financial services include confirming letters of credit (LC) and trust receipts (TR), inventory and contract financing for companies in the manufacturing and service sectors.

Customers include large and small firms from the auto parts, electronics, food and beverage, medical, paper and packaging sectors.

Factoring is a niche service commonly used by smaller companies to manage cash flow. A business can sell an account receivable or invoice to a third party known as a factor in exchange for immediate cash. The factor profits by purchasing the receivables at a discount.

Mr Tan said IFS Capital had nearly 20 years of experience and offered loan approvals within seven to 10 working days, fund transfers within 24 hours of approval and credit lines of up to 90% of the value of the trade document.

Customers can monitor the status of their transaction in real time through the company’s online e-Factoring system.

IFS is 98% held by IFS Capital ( Singapore), a subsidiary of the Phillip Capital Group. The IPO will reduce IFS Capital (Singapore)’s shareholding in its Thai subsidiary to 73%.

KT Zmico is the financial adviser and lead arranger for the IOP, with shares expected to begin trading on the SET in the second quarter of 2010.

IFS Capital aims to provide 18 billion baht in financing credit in 2010, an increase of 30% from this year. It expects to post 2009 net profits of 71 million baht on credit facilities of 13.5 billion to 14 billion baht.