12 minutes
PETALING JAYA: Construction services company Tuju Setia Bhd aims to raise RM56 million from its listing on Bursa Malaysia’s Main Market with the issuance of 80 million new shares at an offer price of 70 sen per share.
From the initial public offering (IPO) proceeds, it has allocated RM32 million towards capital expenditure (capex) to purchase new construction machinery and equipment, as well as building information modelling system software. The capex includes RM8 million for the purchase of land in the Klang Valley to supplement its existing storage area. Aside from that, the group has earmarked RM19 million for its working capital and the remaining RM5 million will be used to defray listing expenses.
Managing director Wee Eng Kong remarked that strong fundamentals have allowed Tuju Setia to persevere over a challenging 2020 on the back of the pandemic fuelled economic downturn, as it won new mandates from developers.
“In fact, over the past 12 months and as recently as March 2021, 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,” he told the media during its prospectus launch today.
“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 RM4.0 billion.”
Despite the challenging conditions, the group’s profitability in 2020 was higher than in 2019.
Wee said the group’s work volume this year is slated to recover to similar levels to those seen in 2019, prior to the Covid-19 pandemic.
He expects the company to recognise RM355 million from its order book between April and the end of this year, excluding revenue recognised in the first three months, a significant improvement from the RM253 million revenue in 2020.
“In short, the company is expected to make good growth for this year.”
The prospectus stated that Tuju Setia will adopt a dividend policy which will distribute 25% of its annual net profit to its shareholders.
Out of the 80 million new shares to be issued, 15.9 million shares will be made available for application by the Malaysian public via balloting, while 6.3 million shares will be made available for application by the group’s eligible directors, employees and persons who have contributed to its success.
A further 31.7 million shares will be made available by way of private placement to selected bumiputra investors approved by the International Trade and Industry Ministry. The remaining 26.1 million new shares, together with 27.0 million existing offer-for-sale shares, will be placed out to selected investors.
Applications for the IPO will close on May 5 and the listing is slated for May 19.
For the listing exercise, Alliance Investment Bank Bhd is Tuju Setia’s principal adviser as well as joint underwriter and joint placement agent, together with CIMB Investment Bank Bhd.
