Haily Group Bhd intends to raise a total of RM20.4 million through the implementation of an initial public offering (IPO) when it is listed on the ACE Market of Bursa Malaysia Securities Bhd on July 21.
Haily is a major contractor involved in the construction of residential and non -residential buildings in the southern region of Peninsular Malaysia, particularly in Johor and is also involved in the provision of rental of construction machinery and equipment.
According to Chief Executive Officer and Executive Director Yoong Woei Yeh, the IPO involved a public issue of 30 million new shares at a price of 68 sen per share, representing about 16.83% of the company's enlarged issued share capital.
Of the 30 million shares, the company offered 8.92 million shares to the public through a voting process with at least 50% allocated to Bumiputera investors.
“Another 10 million for directors, employees and qualified parties who have contributed to the success of the group while 11.08 million to selected investors through private placements.
“In addition, the offer for sale will be made by its promoter involving 18.00 million existing ordinary shares in Haily through private placements to selected investors which is expected to increase gross turnover by RM12.24 million. The promoters are Haily Holdings Sdn Bhd, See Tin Hai and Kik Siew Lee, ”he explained.
Overall, Yoong said, the IPO would generate gross revenue of RM32.64 million with RM20.40 million being from public issues and RM12.24 million from offers for sale.
Of the RM20.40 million to be raised from its public issue, he said RM4.20 million would be used for the purchase of new construction machinery, contract management and accounting equipment and software and office equipment, RM6 million for working capital for construction projects, RM7 million for bank loan repayments and the remaining RM3.20 million as listing expenses.
“We have received positive feedback from investors for the private placement portion of the IPO despite the challenges of the COVID-19 pandemic.
“We believe that with the strong fundamentals of the Malaysian economy, Bursa Malaysia is able to face challenges and ready to grow in the long run. This is very good with Haily Group's listing on the ACE Market, ”he said.
Meanwhile, founder and Executive Director of See Tin Hai said the listing was an important step to enhance the company's position and reputation in the construction services market apart from expanding the customer base in Malaysia.
“We are pleased to provide opportunities for investors and institutions to participate in our equity and continued growth.
“Haily has 18 ongoing building construction projects as well as two construction projects related to civil engineering. The total guaranteed contract value and unbilled contract value as at 10 June 2021 amounted to RM460.04 million and RM249.58 million respectively.
"The ongoing project is expected to be completed in stages between 2021 and 2023," he said.
On the long-term prospects of the construction industry, Tin Hai said the Malaysian economy was expected to grow gradually in the second half of 2021, supported by key growth drivers such as continued increases in global growth, trade and technology cycles, upcoming large-scale infrastructure projects and economic stimulus measures.
“The growth of the residential and industrial sectors in other districts in Johor will provide opportunities for the group, and we have secured secured and unbilled contracts and this can accommodate us throughout the short-term challenges triggered by the COVID-19 pandemic.
“Taking into account our healthy cash position, expected profits to be generated from operations, the amount available under our banking facilities and the proceeds from the IPO, we have sufficient working capital to meet current needs,” he explained.
He added that his party also intends to distribute a dividend of at least 30% of its annual profit to shareholders upon completion of its listing.
