Shares in cleaning services company LS 2 Holdings fell by 14.29% to 6.6 cents on Sept 8, prompting a query from the Singapore Exchange Regulation (SGX RegCo).

 

In its query, the market regulator noted that the company had seen &ldquo unusual price movements&rdquo in its shares. It further asked the company to confirm its compliance with the listing rules, as well as provide any possible explanation for the trading.

 

LS 2 Holdings made its trading debut on the morning of Feb 24, with its initial public offering (IPO) priced at 20 cents.

 

SGX RegCo had, at the time, issued a &ldquo trade with caution&rdquo alert on the counter after shares in the company surged as high as $1.60 before closing the day at 88 cents.

 

In its response later in the day, LS 2 says is is not aware what might have triggered the trading and that it believes it has complied with the relevant listing rules.

CLEANING services company LS 2 Holdings (ENV) ended its trading debut on the Singapore Exchange&rsquo s Catalist board on Thursday (Feb 24) at S$0.88, up from its initial public offering (IPO) price of S$0.20. 

 

By 10.35 am, shares of LS 2 were trading at S$0.85, 2.8 times the opening price of S$0.295, with 570,100 shares changing hands.The counter then made slight gains over the course of the first half of the trading day to finish at S$0.87 as at the mid-day break. 

 

In the second half of the trading session, the stock rose to hit an intraday high of S$1.50 at 1.58 pm. The counter then pared some gains as low as S$1.20 before touching S$1.50 again at 2.30 pm. 

 

Thereafter, the counter lost some steam, falling to S$0.90 at 3.30 pm. LS 2 shares finished the day at S$0.88, with some 0.7 million shares traded. 

 

The company was looking to sell 27.75 million shares at a price of S$0.20 apiece to raise total proceeds of S$5.6 million. The IPO will not have a public tranche.

 

The estimated net proceeds, after deducting expenses relating to the placement, will be S$4.4 million. This placement represents 15 per cent of LS 2 Holdings' post-placement share capital of 185 million shares. The group will have a theoretical market capitalisation of S$37 million after the placement.

 

A bulk of the net IPO proceeds - S$3 million - will be used to fund its business expansion plans. This includes strengthening LS 2' s market position in Singapore, expanding the scope of service offerings, engaging in strategic acquisitions and joint venture partnerships, as well as investing in equipment and technology.

 

The remaining S$1.4 million of the proceeds will be spent on working capital, the company said previously.

 

LS 2 chief executive and executive director Alvin Ong said in a press statement: " We believe the listing is an important platform that will boost the brand value of the company and create new business opportunities."

 

The company offers conservancy, facilities cleaning, housekeeping, school cleaning, road and beach cleaning services, as well as pandemic disinfection services for both the public and private sectors in Singapore.

 

Town councils, facilities managers for commercial and private residential properties, public and private education institutions and private companies are some of the company' s customers.

 

LS 2 intends to diversify its offerings to include horticultural services and infrastructure-level cleaning services such as road cleaning services and waste management services.

 

RHT Capital is the full sponsor and issue manager for the IPO, while Soochow CSSD Capital Markets (Asia) is the placement agent.

THE Singapore Exchange Regulation (SGX RegCo) had on Thursday (Feb 24) issued a &ldquo trade with caution&rdquo alert on newly listed cleaning services company LS 2 Holdings, and is reviewing trades in the company&rsquo s shares.

 

This comes after LS 2 Holdings had on the same day ended its trading debut on the Singapore Exchange&rsquo s Catalist board at S$0.88, up 340 per cent from its initial public offering (IPO) price of S$0.20. The stock also rose to hit an intraday high of S$1.60.

 

This was in contrast to the Straits Times Index' s performance which fell 116.94 points or 3.5 per cent on the same day, SGX RegCo pointed out.

 

According to Catalist rules, a proportion of post invitation share capital in public hands must be at least 15 per cent at the time of listing and the number of public shareholders must be at least 200.

 

The overall distribution of shareholdings should be expected to provide an orderly secondary market in the security, said SGX RegCo.

 

The bourse watchdog noted that out of 207 placees, 166 sold their entire allotment, which significantly reduced the distribution.

 

Majority of these accounts are connected through a common trading representative and the selling was concentrated within the first hour of trading, according to SGX RegCo.

 

It added that it will continue to monitor the trades in LS 2 shares and will take the necessary actions including looking into the placement, reviewing the activity and referring the matter to statutory authorities where warranted.