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BY WAN ILAIKA MOHD ZAKARIA
KUALA LUMPUR: Construction player Gagasan Nadi Cergas Bhd, which is en route for listing on the ACE market on Jan 8, 2019, is unperturbed by the weak sentiment in the construction space as it sees positive growth prospects with its strong order book.
The group, which aims to raise RM42 million from its initial public offering (IPO) exercise, has a total order book of over RM600 million as at Nov 15, 2018 and will sustain until 2021.
Speaking at a press conference in conjunction with its prospectus launch yesterday, the group’s managing director Wan Azman Wan Kamal said the group is currently tendering for RM700 million worth of public and private sector projects and expect to see growth in order books going forward.
“I believe that we will be able to secure more jobs in the coming future. In terms of (the group’s) earnings, we have a steady recurring income coming from our concession (projects).
“So I think it should be okay. We are not worried (too much) on this issue,” Wan Azman added, noting the 60% of the group’s earnings come from the construction segment while the remaining 40% from recurring income.
Meanwhile, TA Securities Holdings Bhd’s head of corporate finance Ku Mun Fong believes there is still demand for good fundamental stocks like Gagasan Nadi Cergas.
“Sentiment do play a part. Depending on the market, the investors at large are still looking at fundamental companies to invest.
“Besides that, the group will only be listed in January next year. Next year is a new year, hopefully the investors will be able to consider good fundamental stocks like Gagasan Nadi Cergas ,” Ku added.
TA Securities is the principal adviser, sponsor, underwriter and placement agent for the group’s IPO exercise.
The group’s IPO entails a public issue of 140 million new shares and an offer for sale of 60 million existing shares at 30 sen per share.
Out of the 140 million new shares, 20 million shares will be for application by the Malaysian public and 20 million shares for application by eligible directors, employees and persons who have contributed to the success of the group. The remaining 100 million shares are allocated for private placement to identified investors.
Of the total proceeds raised, RM14 million will be allocated for funding of Asean Football Federation (AFF) mixed development; RM6.5 million for capital expenditure under Datum Jelatek development; RM16.5 million for working capital; and RM5 million for estimated listing expenses.
Meanwhile, the offer for sale of 60 million existing shares that will raise some RM18 million, will be allocated for private placement to identified investors.
Gagasan Nadi is primarily involved in four business segments, namely building construction, provision of facilities management services as concessionaires, operations of district cooling system for the supply of chilled water and electricity distribution, and property development.
The group currently holds three long-term recurring income contracts, including two 20-year student hostel concession projects and a 20-year operation contract to supply chilled water to the German-Malaysian Institute.
Source: The Sun Daily