Nestcon Bhd Aims To Raise RM45.1 Million From IPO - - Financial Market Media No. 1 in the World Nestcon Bhd Aims To Raise RM45.1 Million From IPO Nestcon Bhd Aims To Raise RM45.1 Million From IPO

June 8, 2021

Nestcon Bhd Aims To Raise RM45.1 Million From IPO

 Nestcon Bhd aims to raise RM45.1 million from an initial public offering (IPO) in the ACE Market, following its listing on June 29.

Group Managing Director, Ir Dr Lim Jee Gin said, of the total, RM6 million will be provided to create an Industrial Building System (IBS) facility for the company's building division and RM6.6 million for machinery and equipment.

Another RM16.5 million will be used to repay bank loans, RM11 million for working capital, RM1 million for software and system upgrades while RM4 million is provided for listing expenses.

Nestcon’s IPO includes a public issue of 161 million new ordinary shares, at a set price of 28 sen per unit.

Of the total issue, 32.2 million shares will be offered to the public; 32.2 million shares for directors and employees; 80.5 million shares for Bumiputera investors approved by the Ministry of International Trade and Industry (MITI); while another 16.1 million shares for selected investors.

In addition, 32.2 million existing shares will be offered to selected investors through a private offering.

When listed, Nestcon's market capitalization will be at RM180.3 million.

Founded in 2010, Nestcon carries out civil engineering and infrastructure works in the country and its spectrum of expertise is broad covering the construction of residential, commercial, industrial and leisure properties.

Currently, Nestcon has 22 contracts in progress worth about RM1.9 billion, with RM1.2 billion being unbilled sales.

Jee Gin added that he expects the unbilled portion to continue to contribute positively to the company's financial performance until 2023.

The projects include Scarletz Suites, Mossaz and Paxtonz by EXSIM Group; Panorama Residences by LLC Bhd; Embayu @ Damansara West by Premier Baycity Sdn Bhd; Kuchai Sentral by Menta Land Sdn Bhd; part of the East Coast Rail Line project as well as three sections of the railway project in Johor.

He added that Nestcon had bid for projects worth RM2.8 billion, with RM1.88 billion or 40 tenders involving civil engineering and infrastructure works while RM965 million for building construction development.

Moreover, according to Jee Gin, the company remains optimistic about its growth prospects, in line with the positive outlook of the construction industry.

Citing projections by the Department of Statistics Malaysia and Protégé Associates, he said the Malaysian construction industry was projected to grow 7.0% this year.

“The drivers of growth include the continued implementation of various infrastructure projects such as ECRL and Mass Rapid Transit (MRT) 2.

"Besides that, it is also encouraged by the government's initiative to revive the property market by reintroducing the Home Ownership Campaign and stamp duty exemption," he explained as reported by Bernama.