BUILDING and infrastructure construction services provider Nestcon Bhd which is en route for a listing on the ACE Market of Bursa Malaysia is rolling out a public issue of 161.0 million new shares of which 64.4 million of the shares be made available for the Malaysian public as well as eligible directors and employees of the company (pink form allocations).
A breakdown of the share allocation is as follows: 32.2 million for the Malaysian public via balloting; pink form allocations (32.2 million); private placement to selected investors (16.1 million) and Bumiputera investors approved by the Ministry of International Trade and Industry (80.5 million).
“We are thrilled that this IPO (initial public offering) exercise brings not only capital funding but also other indirect benefits such as an enhanced brand presence as well as the flexibility to tap into the capital market in the future,” commented Nestcon’s group managing director Datuk Dr Lim Jee Gin.
Nestcon has earlier inked an initial public offering (IPO) agreement with M&A Securities Sdn Bhd.
“While 2020 has been a tremendously challenging year for the construction industry, we believe the worst has passed.”
Citing the Department of Statistics Malaysia and Protégé Associates, Lim projected the construction industry in Malaysia to grow by 7% year-on-year. (yoy) in 2021.
“So far, we have witnessed an improvement in terms of job flows and we believe this trend will continue throughout the year, underpinned by the recovery of the general economy following the roll-out of the vaccination programme.”
“We believe this is an opportune time for us to strengthen our position, operationally and financially to ride on the upward trajectory of the industry.”
One of the company’s strategies is to embrace mass production principles via the adoption of an industrialised building system (IBS), according to Lim.
“With a part of the IPO proceeds, we plan to establish our own on-site IBS facility that will expedite project delivery time and reduce reliance on foreign workers while simultaneously improve the quality of work,” he pointed out.
“Besides that, we are also eyeing larger civil engineering and infrastructure projects such as highways, transportation infrastructure and various renewable energy projects.”
Towards that end, Nestcon intends to strengthen its machineries and equipment count as well as readying a sizeable sum of working capital as performance bonds in anticipation of those large-scale projects, added Lim.
Nestcon is scheduled to be listed on the ACE Market of Bursa Securities by June 2021 with M&A Securities as the adviser, sponsor, underwriter, and placement agent for the IPO exercise. – May 3, 2021
