PETALING JAYA: ACE Market-bound CBH Engineering Holding Bhd will be utilising its listing proceeds for the procurement of equipment and components for mechanical and electrical (M&E) engineering works and to free up its internally generated funds.
In its draft prospectus on Bursa Malaysia, the electrical engineering service provider said as at May 31, it had 13 existing contracts with a total unbilled order book of RM207.04mil, comprising M&E engineering works.
CBH added the group intends to increase its market presence by tendering for projects with a higher contract value. As at May 31, the group had submitted six tenders with a total sum of RM496.09mil, which are still pending evaluation from the potential contract awarders.
Moreover, CBH has also earmarked a portion of the proceeds to be utilised for marginal deposits, which will be pledged with financial institutions to secure bank guarantees for its future projects. This is expected to improve the group’s liquidity.
Some of the proceeds will be used for payment to sub-contractors for future projects and expand the group’s workforce by hiring additional engineers and other personnel.
As at May 31, CBH said its project department comprises 76 personnel and it plans to expand its project team by recruiting an additional 10 engineers, comprising five project managers and five site supervisors.
The remaining funds are to defray listing expenses.
CBH’s initial public offering (IPO) entails a public issue of 298 million new shares.
Some 94.05 million shares will be made available to the public while 28.4 million shares will be offered to its eligible directors, employees and individuals who have made contributions to its success, at a price to be determined later.
Meanwhile, 128.5 million shares will be sold to selected investors through private placement, while 47.02 million shares will be set aside for bumiputra investors who have received approval from the International Trade and Industry Ministry through private placements.
The existing shareholders of the company will also make an offer for sale of 188.09 million existing shares to selected bumiputra investors by way of private placement.
Mercury Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.
