Frencken proposes S$100 million placement to fund expansion, potential M&A

Frencken, a Singapore-based tech solutions provider, announced a proposed share placement of S$100 million on Thursday, Aug 27. The placement involves the sale of 44.1 million shares at S$2.2687 each, representing a 10% discount to the Aug 25 volume-weighted average price of S$2.5207. This share issuance equates to approximately 10.3% of the company's existing issued shares and 9.3% of the total shares post-placement.

The funds raised from the placement will primarily be used to support the company's business expansion, including investments to enhance manufacturing capacity and the capacities of its mechatronics and advanced plastic solutions divisions. Mechatronics, which includes the group's semiconductor business, generated the majority of Frencken's H1 FY2026 revenue at S$383.4 million, accounting for 90.1% of the group's revenue that half-year.

The additional capital raised will also bolster the company's financial position, enabling better strategic investments, mergers and acquisitions, joint ventures, strategic alliances, and other growth opportunities. Ninety percent of the proceeds from the share placement, or S$87.4 million, will be allocated to business expansion and strengthening Frencken's financial position, while the remaining 10%, or approximately S$9.7 million, will be utilized for working capital requirements or to settle existing bank borrowings.

As of June 30, Frencken held cash and cash equivalents of S$123 million, with S$53.2 million in borrowings. The company aims to surpass S$1 billion in annual revenue by the end of FY2026, barring unforeseen circumstances. Frencken's share placement is expected to be finalized on Sep 3. The company's shares were trading at S$2.54 on Tuesday, and a trading halt was imposed on Wednesday morning ahead of the market opening. Over the year-to-date period, Frencken's stock prices have increased by 78.9%.