Construction services company, Tuju Setia Berhad (Tuju Setia) looks to raise RM56 million from its Initial Public Offering (IPO) on the Main Market of Bursa Malaysia Securities Berhad (Bursa Securities).
RM32 million will be allocated for capital expenditure of the targeted RM56 million IPO proceeds.
This would be to purchase new construction machinery and equipment, and Building Information Modelling (BIM) system software to upskill design and construction activities.
Additionally, the group is also looking to acquire land to construct new storage facilities for better organisation and utilisation of machinery and equipment, and improve efficiency of maintenance works.
The remaining RM19 million will be allocated for working capital, and RM5 million to defray listing expenses.
Speaking at the IPO prospectus launch on April 26, Tuju Setia’s Managing Director, Wee Eng Kong has said that the IPO will enhance Tuju Setia’s current core competencies and improve the group’s capacity in constructing high-rise buildings and design, and construction of hospitals and healthcare facilities.
“Over the past 12 months, we secured four new contracts to build high-rise buildings, bringing our order book to RM953.1 million which would sustain our earnings till 2024.
“This IPO will ignite our next growth chapter, as the funds raised will be focused on enhancing our core construction competencies, as well as positioning us better to undertake new projects from our tender book of approximately RM4.0 billion,” he said.
Since its commencement in 2006, Tuju Setia has completed 18 high-rise projects of up to 51 levels with an aggregated contract value of approximately RM2.23 billion.
The Managing Director has further added that this is the best time for Tuju Setia to proceed with the proposed IPO.
“Notably, we will also be implementing a dividend policy to distribute 25 percent of our annual net profit to reward the shareholders of Tuju Setia and to show our appreciation for their confidence in our growth prospects,” he concludes.
Of the 80.0 million new shares, 15.9 million shares will be made available for application by the Malaysian public via balloting, and 6.3 million shares will be made available for application by the group’s eligible directors, employees and persons who have contributed to the success of the group.
While 31.7 million shares will be made available by way of private placement to selected bumiputera investors approved by the Ministry of International Trade and Industry (MITI).
The balance 26.1 million new shares, together with 27.0 million existing offer-for-sale shares, will be placed out to selected investors by way of private placement.