KUALA LUMPUR (June 19): Earthworks and civil engineering firm Advancecon Holdings Bhd, en route to list on the Main Market of Bursa Malaysia on July 10, is looking to raise RM56.7 million through the initial public offering (IPO).
The IPO proceeds are earmarked for capital expenditure, working capital, to repay borrowings and listing expenses.
Advancecon's IPO entails a public issue of 90 million new shares, representing 22.4% of its enlarged issue share capital, at an issue price of 63 sen per share.
Its chief operating officer Yeo An Thai expects the group to keep its profit margin of between 10% and 12% in the current financial year ending Dec 31, 2017 (FY17), similar to that posted in the past three financial years.
Yeo said the group is hoping to secure more projects in the future, leveraging on its enlarged balance sheet after the IPO and the recent contract wins of a combined RM345 million for the West Coast Expressway (WCE) (RM239.8 million) and the Pan Borneo Highway (RM105.2 million) projects.
The two projects were secured at the end of last year, which will take 30 months to complete.
"We are therefore optimistic of attaining more large-scale contracts going forward by leveraging on our enlarged balance sheet after the IPO," said its chairman Yeoh Chong Keat in his speech at the prospectus launch today.
"Furthermore, we have increased our geographical coverage by successfully undertaking numerous earthworks and civil engineering projects nationwide, including the Klang Valley, Negeri Sembilan, Johor, Kedah and Penang in the peninsula, as well as Sarawak," Yeoh added.
As at May 19, 2017, Advancecon's orderbook amounted to RM572.5 million, which will sustain the group for the next two years.
From Jan 1, 2017 to May 19, 2017, Advancecon has also tendered for more than 20 projects with total value of RM496.4 million.
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| ADVCON (5281) - Advancecon Holdings Bhd to raise RM56.7m from IPO |
