PILING and foundation specialist Econpile Holdings Bhd proposed a private placement of up to 133.7 mil new shares or 10% of the total number of issued shares, to provide flexibility in allocating financial resources for the group’s operations.
Based on the indicative issue price of the placement shares of 57 sen, approximately 5% discount to the five-day volume weighted average price, the maximum amount of proceeds that can be raised from the corporate exercise would amount to RM76.7 mil.
According to a Sept 15 note by the company, the proceeds from the private placement would largely be used to finance its working capital requirements.
This includes 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.
“The exercise will position our balance sheet towards longer-term sustainability and to be ready for the construction industry’s eventual recovery,” Econpile executive director and group CEO Raymond Pang said.
Pang also mentioned that the construction sector is anticipated to see an uptrend in the long run as public and private sector projects come on stream 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 RM314.9 mil in new contracts in the last financial year ended June 30, 2020 (FY20) and intend to extend our 33-year track record even further,” he added.
The contracts in question includes a notable RM104.5 mil award to undertake reinforced concrete works for a seven-storey retail podium of Pavilion Damansara Heights Phase 2.
Additionally, the group’s orderbook as at June 30, 2020 stood at RM670 mil, which is expected to 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 of 5pm today, Econpile’s share price stood at 54 sen with a market capitalisation of RM715.56 mil – Sept 17, 2020
