Cabnet to raise RM11.76m through IPO

PETALING JAYA: Cabnet Holdings Bhd aims to raise RM11.76 million from its initial public offering (IPO) in conjunction with its listing on the ACE Market of Bursa Malaysia on May 22.
The company's independent non-executive chairman Datuk Tan Kok Hong said with the IPO, the company is aiming to increase its market presence in Johor while pursuing more opportunities for more projects beyond the state.
Of the total proceeds, 44.7% or RM5.26 million will be used for working capital and the purchase of equipment components and parts for projects in its extra-low voltage (ELV) systems, structured cabling and IT services divisions.
The company will be allotting 25.5% to foot its listing expenses while another 25.5% equivalent to RM3 million will be used to repay bank borrowings of the group, which stands at RM6.29 million. About 4.3% or RM500,000 will be used for research and development (R&D).

“The R&D we are embarking on is more on the Cabnet Integrated Security Solution (CISS) which is an integrated software. What we see today is that in the market, there is a lot of request from customers to have a better secured facility. We know that this market is a growing trend,” COO Yong Thiam Yuen told reporters at a briefing today.

“From the customers' perspective, they want more flexibility in having different types of closed circuit television (CCTV) system, access control system, different brands and today there are certain limitations. So, we see this as an opportunity for us to offer this value proposition to our customers,” he added.

The company said it will be looking for new contracts while also maintaining existing contracts.
“For contracts we have already completed, that’s when we enter into the after sales service for a maintenance contract period. Maintenance bring us sustainability. Existing key customers bring us sustainability as well,” Yong said, adding that the IPO will strengthen the company’s recognition and stature in the market.
The Johor-based group, which is mainly involved in building management solutions provision, is offering 21 million new ordinary shares at an issue price of 56 sen, representing 16.15% stake.
Cabnet will be offering seven million shares to the Malaysian public, 10 million for identified investors through private placement and the remaining four million is allotted for eligible directors, key management personnel and employees as well as those who have contributed to the group's success.
Post-IPO, both majority shareholders namely Tay Hong Sing, who serves as Cabnet's CEO and his deputy Tan Boon Siang, will have their stakes diluted to 25.08% each. Tay and Tan currently hold 29.91% stake each in Cabnet.
Net Posa China's subsidiary Net Posa Hong Kong Ltd, which has a pre-IPO stake of 23.85%, will have its stake diluted to 20%. NetPosa is also Cabnet’s strategic partner in providing video monitoring solutions.
The company has an orderbook of RM33.7 million, which will keep them busy from 2017 till 2019. TA Securities Holdings Bhd is the principal adviser, sponsor, underwriter and placement agent for the listing activity.