GDB Holdings to raise RM43.8m from IPO

KUALA LUMPUR: Construction services firm GDB Holdings Bhd, which is en route to a listing on the ACE Market of Bursa Malaysia Securities Bhd on March 27, plans to raise RM43.8 million from its initial public offering (IPO) to fund future expansion.
GDB focuses on the construction of high rise residential, commercial and mixed development projects.
As at Feb 6, GDB’s order book stood at RM855 million comprising projects such as Westside 3 in Desa Park City, Etiqa Office Tower along Jalan Bangsar, AIRA Residence in Damansara Heights and Menara Hap Seng 3 within the Kuala Lumpur city centre.
At its prospectus launch today, GDB managing director Cheah Ham Cheia said the group’s proposed listing on the ACE Market aims to elevate GDB’s profile, expand its current capacity and extend its services into other building segments such as hospitals and shopping malls.
Going forward, growth in the construction is expected to be driven by major infrastructure projects and increased demand for property.
“We’re mindful of the opportunities in the Malaysian infrastructure sector, hence we plan to expand into civil and infrastructure construction services, to complement our current strength in the building sector,” said Cheah.
He said GDB hopes to establish an infrastructure project team within a year from listing.
“If there’s opportunity, we intend to move into roads, bridges and marine works. That’s our target,” he told a press conference.
As at Feb 26, its tender book stood at RM817 million for hotel, residential and office construction works.
GDB’s IPO entails the issuance of 125 million new shares at 35 sen per share.
Of the 125 million new shares, 12.5 million shares will be for application by the Malaysian public; 15 million shares for application by eligible directors, employees and persons who have contributed to the success of the group; 25.6 million shares will be allocated for private placement to identified investors and 71.9 million shares for private placement to bumiputra investors approved by the Ministry of International Trade and Industry.
There would also be an offer for sale, where 37.5 million existing shares will be allocated for private placement to identified investors.
Of the total IPO proceeds to be raised, RM8.7 million would be utilised for the purchase of new machinery and equipment, consisting of four tower cranes, four passenger hoists, and two concrete placing booms; while RM15.6 million would be for working capital; RM8 million would be allocated for land purchase for storage of equipment and machinery; another RM8 million for the purchase of a new office building to serve as group headquarters. The remaining RM3.5 million will be applied towards defraying of listing expenses.
The group intends to distribute up to 30% of its profit as dividends.
Alliance Investment Bank Bhd is the principal adviser, sponsor, sole underwriter and placement agent for the IPO exercise.