BY NADYA NGUI
Sunway Group founder and chairman Tan Sri Jeffrey Cheah.
KUALA LUMPUR: Sunway Construction Group Bhd is hoping to lure investors to its initial public offering (IPO) with the promise of bigger job wins and a steady dividend payout.
The IPO, however, has come at a volatile period for the stock market.
Shares on Bursa Malaysia retreated yesterday amid mounting concerns Greece will default. The FTSE Bursa Malaysia KL Composite Index fell 1%, going below the 1,700-point level for the first time this year.
Sunway Group founder and chairman Tan Sri Jeffrey Cheah has brushed off the pessimism, saying that the construction industry has the backing from the Government under the 11th Malaysia Plan.
“If you see in the construction segment the Government is pouring in money. It’s RM260bil for the next five years,” he said when met after the group’s prospectus launch yesterday.
“Therefore it is very exciting for us. If investors don’t see it, then what can I do?” he said.
Sunway’s construction division is making a comeback to Bursa Malaysia after an 11-year hiatus. It will be the second biggest stock offering this year, behind Malakoff Corp Bhd.
The group is offering RM1.20 per share for the sale of 398.7 million ordinary shares and an over-allotment option of up to 59.8 million shares.The company has promised to return 35% of its annual net profit as dividends.
The IPO will raise at least RM478mil, most of it to be returned to Sunway Bhd’s shareholders as special dividends.
Sunway Bhd chief financial officer Chong Chang Choong added that the current IPO price was of reasonable valuation.
“Even if the market is not very exciting due to unfavourable external conditions, in terms of the valuation ... for long term investors it’s a good entry point to participate,” he added.
After its re-listing on July 28, Sunway Construction will be the largest pure play construction company in Malaysia based on its revenue of RM1.9bil in its financial year ended Dec 31, 2014.
The group said it aimed to grow its construction order book by between RM1.5bil and RM2bil by the end of this financial year ending Dec 31, with RM500mil already secured so far.
Sunway Construction is involved in projects such as the MRT, LRT, BRT, the Kuala Lumpur Convention Centre and Sunway Pyramid Shopping Mall.
