GDB Holdings targets to raise RM43.8m from IPO

Part of the proceeds will be utilised for purchasing new machinery and equipment, says MD


GDB Holdings Bhd, a construction services firm, aims to raise RM43.8 million from its initial public offering (IPO) to fund its future expansion.

MD Cheah Ham Chiea said the firm has started taking applications for its IPO and it will be closed on March 12, 2018.

“The major portion of the proceeds, RM15.6 million, will be allocated for the working capital.

“The remaining will be utilised for purchasing new machinery and equipment, which will complement our capacity to take on more projects and achieve a faster completion period,” he told reporters at the launch of its IPO prospectus in Kuala Lumpur yesterday.

From the total proceeds, GDB will allocate RM8.7 million for the purchase of two cranes, four passenger hoists and two concrete placing booms, and RM8 million for acquiring a new office as its headquarters.

Cheah added that another RM8 million will be utilised for a land acquisition for machinery and equipment storage.

“At the moment, we are still identifying the land area and we have a year to complete that. “It will be used purely to store the unused equipment and act as a hub to maintain our machinery,” he said.

The construction firm’s IPO is offering 125 million issuance of new shares at 35 sen per share.

Ten percent of the shares will be set aside for Malaysian subscribers, 12% for eligible directors, employees and selected contributors of the company, 20.5% for identified investors, and the remaining 57.5% for Bumiputera investors.

The company is also offering 37.5 million existing shares for sale through private placement to identified investors.

Moving forward, Cheah added that GDB is planning to extend its services to the civil and infrastructure sector as the company is currently completing the construction work in property sectors, focusing on high-residential, commercial and mixed developments.

“Through the accumulated experiences of our board of directors and key senior management in managing such projects, we hope to establish an infrastructure project team to gain formidable entry into this segment,” he said.

Barring any unforeseen circumstances, Cheah said GDB is targeting to be listed on the ACE Market of the local bourse on Mar 27, 2018.

Alliance Investment Bank Bhd (AIBB) is the principal advisor for the listing exercise.

As at Feb 6, 2018, GDB’s orderbook stood at RM855 million including projects in Desa Park City, Bangsar, Damansara and Kuala Lumpur city centre.

For the 10 months ended Oct 31, 2017, GDB posted a revenue of RM240.7 million and net profit of RM20 million.