AME Elite to raise RM111.1m from IPO for business expansion

by SHAZNI ONG/ graphic by TMR

AME Elite Consortium Bhd aims to raise RM111.1 million from its main board listing and use the bulk of the money for its business expansion.

The initial public offering (IPO) will be priced at RM1.30 per share with the listing scheduled for Oct 14, 2019. Shareholders stand to make RM55.5 million via an offer for sale.

Group MD Kelvin Lee said the proposed listing was the culmination of AME Elite’s track record in undertaking design-and-build projects for large manufacturing plants and industrial buildings in Malaysia, as well as developing under the “i-Park” brand.

“The listing is set to raise estimated total proceeds of RM111.1 million for AME Elite, of which RM69.1 million will be allocated for future industrial property development and investment projects including land acquisitions and joint ventures, within 36 months from listing,” he said after the group’s IPO prospectus launch in Kuala Lumpur yesterday.

Some RM23 million of the money raised will be used as working capital for the [email protected] Airport City development and to partially fund the construction of a clubhouse.

Meanwhile, RM9 million will be set aside to complete the expansion of the group’s precast concrete fabrication capacity, and the remaining RM10 million for the defraying of listing expenses, he said.

Lee added that AME Elite will also focus on completing ongoing industrial park projects and increase the portfolio of industrial properties in Johor.

AME Elite acquired a 76.59-acre (31ha) plot of land for RM135.1 million in August 2019 to build the third phase of the [email protected] Airport City, with construction scheduled to begin in the first quarter of 2020 and all phases of the development estimated to be completed by 2025.

Through its jointly-controlled entity, Axis AME IP Sdn Bhd, AME Elite is developing Phase 3 of [email protected] in Johor, which is estimated to complete by 2023, Lee said.

The group’s [email protected], [email protected] Indahpura (Phase 1 and 2) and [email protected] Senai Airport City industrial park projects have garnered interests from multinational and local corporations across various sectors such as electronics, logistics, consumer and food.

“Backed by our wide experience, we are ready to expand beyond our home state of Johor and replicate our proven industrial park business across Peninsular Malaysia now,” Lee said.

Most of the capital raised from AME Elite’s IPO will be channelled for future industrial property development and investment projects, including land-bank acquisition and potential joint ventures, he added.

AME Elite’s IPO consists of a public issue of 85.4 million new ordinary shares along with an offer-for-sale of 42.7 million shares, at an issue price of RM1.30 per ordinary share.

From the public of 85.4 million new shares, 8.5 million shares will be allocated for application by the Malaysian public and 8.5 million shares for application by eligible directors and employees.

19.2 million shares will also be set aside for placement to institutional and selected investors, and 49.1 million shares for placement to Bumiputera investors, approved by the Ministry of International Trade and Industry.

Additionally, 42.7 million existing shares will be allocated for placement to institutional and selected investors through an offer-for-sale.

Applications for AME Elite’s IPO opened yesterday and will close on Sept 30, 2019.

AME Elite is the fourth Main Market listing this year, along with seven companies on Bursa ACE Market and 12 on Bursa’s LEAP (Leading Entrepreneur Accelerator Platform) Market.

Leong Hup International Bhd was the first major listing on May 16 this year, at an issue price of RM1.10 per share, raising RM1.03 billion with 3.65 billion shares listed.

The stock has not fared well, closing at 83 sen yesterday and valuing it at RM3.03 billion.

HPMT Holdings Bhd was the second Main Market listing on June 12 at an issue price of 56 sen per share and raising RM65.3 million in the process.

HPMT Holdings closed at 36 sen yesterday, valuing the company at RM116.61 million.

UWC Bhd was listed on the Main Market on July 10 at an issue price of 82 sen per share, raising RM84.47 million from the exercise. UWC closed at RM1.57 yesterday, taking its market capitalisation to RM575.88 million.