PETALING JAYA: Main market-bound Advancecon Holdings Bhd has signed an underwriting agreement with RHB Investment Bank Bhd for the latter to be its principal adviser, underwriter and placement agent for the company’s proposed initial public offering (IPO) exercise.

In a statement yesterday, the earthworks and civil engineering services specialist said the proceeds from its IPO will mainly be used for capital expenditure, working capital, repayment of borrowings and defraying of listing expenses.
The company, which is slated for listing by the middle of this year, said its IPO entails a public issue of 90 million new shares representing 22.4% of the group’s enlarged share capital.

From the new shares, Advancecon said 37 million shares will be allocated for private placement to institutional and identified investors.

A further 18 million shares for private placement to identified bumiputra investors approved by the International Trade and Industry Ministry, while five million shares will be for eligible directors and employees of the group.
Meanwhile, 30 million shares will be for application by way of balloting to the Malaysian public.

“There would also be an offer for the sale of existing shares, where 33 million shares will be allocated for private placement to identified bumiputera investors approved by the Ministry,” said Advancecon.

In the same statement, Advancecon group chief executive officer Datuk Phum Ang Kia said the signing of the underwriting agreement reiterated the underwriter’s confidence in the company.

“The proceeds from the IPO would generally be used to enhance our operations to take advantage of the upcoming growth in the construction sector, which will help us expand our current capabilities.”

Advancecon’s customer base comprises prominent property developers which include Eco World Development Group Bhd, Paramount Corp Bhd, Perbadanan Kemajuan Negeri Selangor, Sime Darby Bhd, SP Setia Bhd and Tropicana Corp Bhd.

To date, Advancecon has undertaken earthworks and civil engineering works for notable projects nationwide, including various township developments such as Setia EcoHill, Setia Eco Gardens, Eco Majestic and Tropicana Aman, as well as infrastructure projects such as the Trumpet Interchange and Ecohill link at Lekas Highway.

For the financial year ended Dec 31, 2015, Advancecon’s net profit increased by 39.8% year-on-year to RM29.9mil from RM21.4mil previously. Revenue rose 32.3% to RM264.3mil from RM199.8mil a year earlier.

Advancecon’s wide range of earthworks services encompass rock-blasting, excavation and fill, erosion and sediment control plan, and compaction and finishing of surfaces. The company also specialises in civil engineering services such as road and drainage works.

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