Advancecon signs IPO underwriting deal with RHB Investment Bank

PETALING JAYA: Advancecon Holdings Bhd, which is en route to a listing on the Main Market of Bursa Malaysia in the middle of this year, has signed an underwriting agreement with RHB Investment Bank Bhd, its principal adviser, underwriter and placement agent in conjunction with its proposed initial public offering (IPO).
The exercise entails a public issue of 90 million new shares representing 22.4% of the group’s enlarged share capital, in which 37 million shares will be allocated for private placement to institutional and identified investors and 30 million shares for application by way of balloting to the Malaysian public.
Advancecon said there will also be an offer for the sale of existing shares, where 33 million shares will be allocated for private placement to identified bumiputra investors approved by the Ministry of International Trade and Industry.
Advancecon is primarily involved in the provision of earthworks and civil engineering services in Malaysia, as well as related support services such as sale of construction materials, hiring of machinery and ad-hoc general construction services.
“The signing of the underwriting agreement not only reiterates the underwriter’s confidence in us, but also takes us a step closer in our IPO journey,” its group CEO Datuk Phum Ang Kia said in a statement yesterday.
“This has enabled us to build strong rapport with notable property developers in various parts in Malaysia, and enabled us to grow alongside their expanding operations,” he added.
The group said proceeds from its IPO will mainly be used for capital expenditure, working capital, repayment of borrowings and defraying of listing expenses.
Advancecon’s customer base comprises prominent property developers, including Eco World Development Group Bhd, Paramount Corp Bhd, Selangor State Development Corporation, Sime Darby Bhd, SP Setia Bhd and Tropicana Corp Bhd.
For the financial year ended Dec 31, 2015, Advancecon’s net profit increased 39.8% year-on-year to RM29.9 million, from RM21.4 million previously.