The issuance of new shares will increase KAB’s enlarged total number of shares from 240m to 320m

By TMR

Kejuruteraan Asastera Bhd (KAB) has issued a prospectus for its initial public offering (IPO) with up to 112 million shares for the exercise.

The mechanical and electrical engineering service provider will issue 80 million new shares and offer for sale of up to 32 million existing shares as it seeks to list on the ACE Market of Bursa Malaysia.

KAB in its prospectus released yesterday said out of the 80 million new shares, 16 million will be allocated for the Malaysian public, eight million for eligible persons including its employees and 56 million for institutional and private investors. The shares have been priced at 25 sen a share.

The issuance of the new shares will increase KAB’s enlarged total number of shares from 240 million shares to 320 million, subsequently boosting the company’s share capital by RM20 million to RM32 million.

KAB’s MD Datuk Lai Keng Onn who currently owns 95% of the total existing shares in the company will dilute up to 32 million shares, or 10%, based on the enlarged total number of shares. The 32 million shares have been allocated for institutional and selected investors.

The company in a statement to Bursa Malaysia said its listing has been tentatively set on Nov 17, 2017.

KAB said the planned IPO would allow the engineering company to grow its market share in Malaysia, strengthen the mechanical engineering segment and diversify its revenue streams.

KAB will utilise 60.5% from the IPO proceeds for working capital, 11% for capital expenditure, and 3% to set up a new branch in Johor Baru and an additional office in Kuala Lumpur.

Based on the IPO price, the company market capitalisation upon listing is about RM80 million.

The group posted a net profit of RM2.84 million for its financial period ended May 31, 2017, with a revenue of RM43.81 million during the same interval.

It has registered a net profit of RM6.56 million for its financial year 2016, giving it a basic and diluted earnings per share of 2.05 sen based on an enlarged share base of 320 million shares upon its listing.

The company said the electrical engineering division accounts for more than 80% of the company revenue from 2014 to 2016.

Its orderbook as at end of May 2017 stood at RM216.9 million.