Econpile proposes private placement for working capital needs

PILING and foundation specialist Econpile Holdings Berhad, has proposed a private placement of up to 133.7 million new shares, or 10% of the total number of issued shares, to provide flexibility in allocating financial resources for the Group’s operations.

The proceeds from the private placement would largely be used to finance its working capital requirements such as payment of trade and other payables, general administrative expenses and other operating expenses, as well as partial repayment of the Group’s banker’s acceptances.

Based on the indicative issue price of the placement shares of RM0.5735, approximately 5% discount to the 5-day volume weighted average price, the maximum amount of proceeds that can be raised from the corporate exercise would amount to RM76.7 million.

Econpile Holdings Berhad executive director/group chief executive officer of Raymond Pang said: “This exercise will position our balance sheet towards longer-term sustainability and to be ready for the construction industry’s eventual recovery.

“The widespread impact of COVID-19 is unprecedented, but we recognise that it is a test of the fittest players.

“The construction sector is anticipated to see an uptrend in the long run as public and private sector projects come onstream in the crucial transport and property sectors to support the nation’s development.

“Illustrating this, we have remained competitive in the industry, having won more than RM300 million in new contracts in the last financial year ended 30 June 2020, and intend to extend our 33-year track record even further.”

Econpile had secured RM314.9 million worth of contracts in the financial year ended 30 June 2020, most notably a RM104.5 million award to undertake reinforced concrete works for a 7-storey retail podium of Pavilion Damansara Heights Phase 2.

The Group’s orderbook as at 30 June 2020 stood at RM670.0 million, which will provide earnings visibility over the next 15 months.

Among the prominent projects include works for Pavilion Damansara Heights, LRT3 – Package GS04, TNB mixed development and Terra Putrajaya Project.

As at Bursa closing Econpile’s shares traded at 54 sen with a market capital of 715.56 mil. – Sept 15, 2020

 

 

 

 

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