ACE Market-bound Haily Group aims to raise RM20.4 mln from IPO

KUALA LUMPUR, June 30 -- Haily Group Bhd, en-route to a listing on the ACE Market of Bursa Malaysia Securities Bhd on July 21, aims to raise RM20.4 million through its Initial Public Offering (IPO) exercise.

Haily is principally a main contractor involved in building construction of residential and non-residential buildings in the southern region of Peninsular Malaysia, particularly in Johor, and is also involved in the provision of rental of construction machinery.

Chief executive officer and executive director Yoong Woei Yeh said the IPO involved a public issue of 30 million new shares at 68 sen each, representing approximately 16.83 per cent of the enlarged issued share capital of the company.

“Out of the 30 million shares, it is offering 8.92 million shares to the Malaysian public via a balloting process, of which at least 50 per cent will be set aside for Bumiputera investors.

“Another 10 million is allocated to eligible directors, employees and persons who have contributed to the success of the group, and 11.08 million to selected investors by way of private placement.

“In addition, there will be an offer for sale by its promoter involving 18.00 million existing ordinary shares in Haily by way of private placement to selected investors, which is expected to raise gross proceeds of RM12.24 million. The promoters are Haily Holdings Sdn Bhd, See Tin Hai and Kik Siew Lee,” he said at the launch of the company's prospectus in conjunction with the IPO.

Overall, Yoong said the IPO will raise total gross proceeds of RM32.64 million, out of which RM20.40 million shall be from the Public Issue and RM12.24 million from the Offer for Sale.

Out of the total proceeds to be raised from the public issue, he said RM4.20 million would be used to purchase construction machinery, equipment, as well as new contract management and accounting software and office equipment, RM6 million for working capital for construction projects, RM7 million for repayment of bank borrowings, and the remaining RM3.20 million to defray listing expenses.

“We have received positive response from the investors for the private placement portions of the IPO despite the timing and the challenges of the COVID-19 pandemic.

“We believe that with the strong fundamentals of the Malaysian economy, Bursa Malaysia is able to weather the challenges and is poised to grow in the long term. This augurs well with the listing of Haily Group on the ACE Market,” he noted.

Meanwhile, founder and executive director See Tin Hai said the listing exercise was an important step to increase the stature of the group and to enhance its reputation in the construction services market as well as expanding the customer base in Malaysia.

“We are excited to provide the opportunity for investors and institutions to participate in our equity and continuing growth.

“Haily has 18 ongoing building construction projects as well as two civil engineering related construction projects. The group's total secured contract value and unbilled contract value as at June 10, 2021 stood at RM460.04 million and RM249.58 million respectively.

“The ongoing projects are expected to be completed progressively between 2021 and 2023,” he shared.

On the long-term prospects of the construction industry, See said Malaysia’s economy was expected to gradually improve in the second half of 2021, underpinned by key growth drivers such as continued improvement in global growth, trade and technology cycle, upcoming large-scale infrastructure projects as well as economic stimulus measures.

“The growth of the residential and industrial sector in other districts in Johor will provide opportunities for the group, and we have secured and unbilled contracts that can sustain us through the near-term challenges brought about by the COVID-19 pandemic.

"Taking into consideration our healthy cash position, expected profits to be generated from our operations, the amount available under our existing banking facilities, and proceeds from the IPO, we will have adequate working capital to meet our present and foreseeable requirements as we continue to replenish and enlarge our order book to provide business growth,” he said.

He added the group has the intention to distribute dividends of at least 30 per cent of its annual profits attributable to its shareholders upon completion of the listing, although it is not a legally binding obligation/guaranteed commitment to the shareholders.

-- BERNAMA