Underground utilities and substation engineering specialist MN Holdings Bhd expects to raise RM17.2 million under its listing on the ACE Market of Bursa Malaysia Securities Bhd for business expansion.
The Company plans to use RM5.84 million (34.0%) raised from the initial public offering (“IPO”) to purchase various types of machinery and equipment over the next two years to support its business expansion for the underground utilities and substation engineering services and solutions segments.
MNHB’s operational resources to carry out underground utilities engineering and substation engineering works for its customers depend largely on the availability of its machinery and equipment.
The acquisition of these machineries and equipment will allow MNHB to scale up its resources and project capabilities in undertaking projects that require different scales and complexities.
A further RM4.33 million (25.2%) of the proceeds will be used for general working capital to support working capital requirements for new and existing projects.
Mr Loy Siong Hay Managing Director of MNHB said the Company’s working capital requirements are expected to increase in line with the growth in its business operations.
“Currently, our Group finances general working capital through a combination of internally generated funds and external financing such as bank borrowings. The allocation of proceeds for our general working capital requirements will reduce our dependency on external financing and allow us to undertake more projects concurrently,” he added.
The remainder of the proceeds will be used for the repayment of bank borrowings amounting to RM4.00 million (23.3%) and RM3.00 million (17.5%) for estimated listing expenses.
Commenting on the Group’s current order book, Mr Loy said, MNHB has an order book of approximately RM172.2 million as at 9 March 2022, comprising RM135.4 million from underground utilities engineering services and solutions segment and RM36.8 million from substation engineering services and solutions segment.
“This order book will be recognised progressively over the next one to four financial years based on the expected progress of each project,” Mr Loy further added.
MNHB is the exclusive partner to Rentak Segar Sdn Bhd and Impiana Mahir Sdn Bhd (“Impiana Mahir”) for underground utilities engineering services and solutions projects. Rentak Segar and Impiana Mahir are TNB-approved main contractor.
As at 9 March, MNHB has completed 375 contracts, with a cumulative value of RM261.0 million, in the underground utilities and substation engineering services and solutions segments.
Under the listing exercise, MNHB is issuing 81.75 million new shares in MNHB representing approximately 20.0% of the enlarged share capital at an issue price of RM0.21 per share.
Of the 81.75 million new shares, 20.44 million new shares (5.0%) will be made available to the Malaysian public via balloting; 8.18 million new shares (2.0%) for its eligible Directors and employees under Pink Form Allocations; 51.09 million new shares (12.5%) are reserved for private placement to Bumiputera investors approved by the Ministry of International Trade and Industry, Malaysia while the remaining 2.04 million new shares (0.5%) will be placed out to selected investors.
As part of its listing exercise, the existing shareholders of the Company will also make an offer for sale of 40.88 million shares to selected investors by way of private placement.
Based on the enlarged share capital of 408.75 million shares, MNHB is expected to have a market capitalisation of RM85.84 million.
The IPO is open for subscription from today until 15 April 2022. A copy of the prospectus relating to this offering may be obtained from Bursa Securities’ website
MNHB’s listing on the ACE Market of Bursa Securities is tentatively scheduled on 28 April 2022.
