MN Holdings to raise RM17m from ACE Market listing

by AZALEA AZUAR / pic by TMR FILE

MN HOLDINGS Bhd plans to raise RM17.2 million through its listing on the ACE Market of Bursa Malaysia for expansion and support of underground utilities and substation engineering services segments.

The company plans to use RM5.84 million or 34% raised from the IPO to purchase various machinery and equipment over the next two years.

Since MN Holdings’ operational resources rely mostly on the availability of its machineries and equipment, the new acquisition would allow the company to add to its resources and project capabilities in undertaking projects that need different scale and complexities.

Moreover, 25.2% of the IPO proceeds will be channelled into general working capital to support working capital requirements for new and existing projects while the rest will be used to repay its bank loans of up to RM4 million (23.3%).

MN Holdings MD Loy Siong Hay expected the company’s working capital requirements to increase in line with the growth of its business operations.

“Currently, our group finances general working capital through a combination of internally generated funds and external financing such as bank borrowings.

“The allocation of proceeds for our general working capital requirements will reduce our dependence on external financing and allow us to undertake more projects concurrently,” the company said in a statement last Friday.

MN Holdings present orderbook is worth RM172.2 million as of March 9, which includes RM135.4 million worth of contracts at its underground utilities engineering services and solutions segment and RM36.8 million from its sub-station engineering services and solutions segment.

The company has managed to complete 375 contracts worth a total RM261 million, in underground utilities and substation engineering services and solutions segments.

MN Holdings will issue 81.75 million new shares in its listing exercise, which represent 20% of its enlarged share capital, at an issue price of 21 sen per share.

Some 20.44 million new shares (5%) will be offered to the public through balloting, 8.18 million shares (2%) to its eligible directors and employees under the Pink Form Allocations while 51.09 million new shares (12.5%) are reserved for private placement to Bumiputera investors approved by the Ministry of International Trade and Industry. The remaining 2.04 million new shares (0.5%) will be placed out to selected investors.

MN Holdings’ shareholders will sell 40.88 million shares to selected investors by way of private placement.

The company is expected to have a market capitalisation of RM85.84 million based on the enlarged share capital of 408.75 million shares.

Loy is positive about the group’s prospects this year as he believes the government’s decision to reopen Malaysia’s international borders would attract foreign direct investment (FDI) into the country.

“Once the border is open, I believe this may have some FDI into our country because quite a substantial part of our jobs are actually from the FDIs,” he said.

MN Holdings is scheduled to list on April 28 on the Ace Market, which will make it the eighth listing of the year, after the listing of Cengild Medical Bhd on April 18.