The bulk of the proceeds (S$6.6 million) will be used for business expansion in Germany, Taiwan and the US within this year, said Trek 2000 CEO Henry Tan. The remaining funds will be used in research and development, or as general working capital and to repay bank loans.
"Where digital compression technology is concerned, the markets are in (Germany, Taiwan and the US)," said Tan, whose company specializes in developing digital compression technology such as VCD, DVD and MP3 player solutions.
The total share offering in the IPO represents about 15.5 percent of the company and consists of a public tranche of 6 million shares and a placement tranche of 24.8 million shares. Among the placement shares, 3 million shares were reserved for employees and business associates. The remaining shares were fully taken up, said Trek 2000 at its IPO launch today.
Trek 2000 develops customized engineering solutions for PC manufacturers and embedded solutions for electronic appliances such as TV and washing machine controls. The company is the appointed design house for electronics firm Toshiba Electronics Asia (S) Pte Ltd.
Its customers include contract manufacturers Natsteel Electronics and Solectron Technology (M) Sdn Bhd, Videocon Co Ltd and Digital Appliance Control (S) Pte Ltd.
Established here in 1995, the Trek Group has offices in Malaysia, Thailand and India and recorded S$65.9 million in revenues for its fiscal year ended December 31, 1999 compared to S$40.6 million the previous year. Its net profit jumped almost seven-fold to S$2.5 million last year from S$365,000 in 1998.
"The electronics sector is on the up-swing. We are optimistic that we will continue to see revenue growth for the next two years," said Tan.
ThumbDrive
Latest in the company's portfolio of compression technology products is the ThumbDrive. It is touted as one of the world's smallest USB-based external storage device, only 57mm in length and tipping the scales at a mere 30g.
Last month, Trek shipped its first batch of 3,600 units worldwide. Tan told CNET Singapore that 15,000 ThumbDrives will be shipped in May.
Toshiba Dynamics, Sanyo, Tech Pacific and Intraco are currently distributing the ThumbDrive locally and regionally. Notebook manufacturer Toshiba will also be bundling ThumbDrive with its laptops, Tan added.
ThumbDrive will retail between US$36 (S$61) and US$499 (S$848) depending on the storage capacity which ranges from 8MB to 256MB.
When asked whether Iomega's Clik is a competitive product, Tan said: "They are not a direct competitor, but the closest."
He stressed the fundamental diffences between the two products. "Iomega Clik requires an external drive to read but not the ThumbDrive. (In addition), ThumbDrive does not have mechanical parts that are vulnerable to vibrations," he added.
The IPO will close at noon on May 22, 2000. Trading is expected to commence at 9 am two days later. Vickers Ballas & Co Pte Ltd is the lead manager, underwriter and placement agent for the share sale, while Lum Chang Securities Pte Ltd is the co-placement agent and underwriter for the issue.
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