SOUTHERN Cable Group Bhd has received an overwhelming response for the public tranche of its initial public offering (IPO) on the ACE Market of Bursa Malaysia Securities Bhd, with its public portion oversubscribed by 10.5 times.
In a statement today, the cable and wire manufacturer said the group received 10,308 applications for 459.0 million shares with a total value of RM156.1 mil.
The public tranche entails a total of 40 million shares for application by the Malaysian public under the Group’s IPO scheme.
“The oversubscription is a vote of confidence for our business model and prospects as a proxy to the essential utility sector in the country.
“Going forward, we intend to use the proceeds from the IPO to better position our Group to grow alongside the recovery of the infrastructure segment,” said the Group’s managing director, Tung Eng Hai.
As of Sept 1, 2020, the group’s order book stood at RM405.4 mil, which includes contracts secured from the essential services sector such as Tenaga Nasional Bhd and Telekom Malaysia Bhd.
Southern Cable said this would sustain the group’s earnings until the financial year ending Dec 31, 2022.
“To this end, we will adopt a dividend policy to distribute at least 15% of our annual audited profit after tax attributable to shareholders as dividends, subject to business performance and recommendation of the board,” added Tung.
The group is set to be listed on Bursa Malaysia on Oct 16 at an IPO price of 34 sen per share with a market capitalisation of RM272.0 million.
Founded in 1993, it currently manufactures cables and wires for use in various industry sectors including power distribution and transmission, telecommunications, building and construction, infrastructure, manufacturing, and processing industries.
Southern Cable targets to raise RM71.2 million in proceeds, of which RM30.0 million would be allocated for capital expenditure and expansion, while RM27.5 million will be used for working capital.
MIDF Amanah Investment Bank Bhd is the principal adviser, sponsor, sole underwriter, and placement agent for the IPO exercise. – Oct 8, 2020, Bernama
