Kumpulan Kitacon to raise RM51.7m from IPO

The company intends to declare a yearly dividend, equivalent to at least 25% of its profit after tax attributable to its shareholders

CONSTRUCTION services provider, Kumpulan Kitacon Bhd, has set its IPO price at 68 sen per share to raise RM51.7 million.

The company unveiled its IPO prospectus yesterday in conjunction with its proposed listing on the Main Market of Bursa Malaysia Securities Bhd, which is set for Jan 17, 2023.

The IPO exercise involves an offer for sale of 62.5 million shares, and will also raise about RM51.7 million through a public issue of 76.1 million shares at an issue price of 68 sen per share.

Kitacon has earmarked 46.4% of the IPO proceeds for the purchase of construction equipment, which includes aluminium formwork systems, scaffoldings and cabins. 

Meanwhile, 38.7% has been budgeted for the purchase of land and construction of a storage and refurbishment facility while 6.3% has been set aside for working capital expenditure. The remaining proceeds will be utilised for the listing expenses.

Based on the enlarged issued share capital of 500 million shares and an issue price of 68 sen per share, Kumpulan Kitacon will have a market capitalisation of RM340 million. The company intends to declare a yearly dividend, equivalent to at least 25% of its profit after tax attributable to its shareholders.

The company started more than 30 years ago with various small-scale construction and sub-contracting works. 

Kitacon’s MD Tan Ah Kee (fifth from left) said the group have since successfully completed a wide range of construction projects including residential, commercial, industrial, purpose-built and institutional buildings, and today, specialise in township construction.

“Looking ahead, our goal is to broaden our reach and expertise in township construction as we aim to secure more contracts from new clients while continuing to foster our business relationships with existing clients,” Tan said.

Additionally, he said, the company will continuously explore and adopt progressive construction techniques such as the use of aluminium framework system to improve its productivity and deliver projects within the stipulated time, cost and highest quality standards. 

The public issue portion of the IPO will be made available from yesterday and the application will close on Monday, Jan 9, 2023 at 5pm.

RHB Investment Bank Bhd is the principal advisor, sole underwriter and sole placement agent for this IPO exercise. — TMR