Gagasan Nadi Cergas to raise RM42m from IPO

By DASHVEENJIT KAUR

Construction company Gagasan Nadi Cergas Bhd is looking to raise RM42 million from its upcoming initial public offering (IPO) exercise on Bursa Malaysia’s ACE Market despite the current slowdown in the industry sector.

The company is seeking to expand into the property development market from its four business segments including building construction, provision of facilities management services and operations of district cooling system (DCS) for the supply of chilled water.

The company’s IPO entails a public issue of 140 million new shares and offer for sale of 60 million existing shares at 30 sen apiece.

Of the total, 20 million shares will be for local public, 20 million for eligible directors and employees, while the remaining 100 million shares are for private placement to identified investors.

Meanwhile, 60 million existing shares would be allocated for private placement as well.

As for the proceeds from the public issue of RM42 million to be raised, RM14 million would be allocated for the funding of Asean Football Federation (AFF) mixed development, RM6.5 million for capital expenditure of its DCS under the Datum Jelatek Development, and RM16.5 million for working capital.

The remaining RM5 million is to defray estimated listing expenses, while the total proceeds from the offer for sale of RM18 million will accrue entirely to the offeror.

Group MD Wan Azman Wan Kamal said the proposed listing of Gagasan Nadi Cergas is aimed to elevate its profile, extend its services in moving up in the construction value chain and enhance the group’s business model.

“While we have achieved a track record of more than 20 years in the construction sector, we recognise the importance of moving up in the value chain and transitioning our business model to include a recurring income stream.

“As such, part of the proceeds from our IPO would be allocated for our utilities segment in our DCS under the Datum Jelatek development, which is in line with our strategy to expand recurring income from longterm contracts,” he told reporters after the company’s prospectus launch in Kuala Lumpur yesterday.

Wan Azman also said its AFF mixed development in Putrajaya would house the new football federation’s headquarters and 458 units of serviced apartments.

“This would establish Gagasan Nadi Cergas’ mark as a property developer, extending our capability within the construction value chain,” he added.

Currently, the group holds three long-term recurring income contracts including a 20-year facility management concession for a hostel at the International Islamic University Malaysia campus in Kuantan, Pahang, until 2034.

It also has a 20-year facility management concession for hostel at Universiti Teknikal Malaysia Melaka campus in Durian Tunggal, Melaka, until 2037 and a 20-year operation contract for a DCS to supply chilled water to the German-Malaysia Institute in Bangi, Selangor, until 2028.

Wan Azman said despite the sombre outlook on the construction sector following the government’s move to review some mega projects and reconsider the way tenders are awarded, the group is optimistic that it would be able to secure several projects from both the public and private sectors.

The firm’s IPO is available for subscription from yesterday until Dec 24.

The group targets to be listed on the ACE Market on Jan 8 next year.