Coastal Contracts Bhd, which is aiming for a KLSE main board listing, plans to expand its coastal vessel business to include special tugboats to serve the oil and gas industry.
Its managing director Ng Chin Heng said two anchor handling tugboats were being built for that purpose at a cost of RM32mil.
The boats are expected to be ready by early next year, which would enable us to establish a presence in the region's oil and gas industry, he said.
He was speaking after the signing of a share underwriting agreement in Kuala Lumpur yesterday between Coastal Contracts and AmMerchant Bank Bhd.
The flotation is expected to raise RM21mil, of which a large portion would be used for working capital, construction of a new factory and purchase of new equipment.
For its initial public offering, Coastal Contracts is offering for sale 16.9 million new RM1 shares at RM1.60 each.
Of the total, 10.83 million shares are available to the public, 5.5 million placed to selected investors, and 570,000 allocated to eligible directors and employees.
AmMerchant Bank is the adviser, managing underwriter and placement agent for the listing.
Coastal Contracts is principally involved in the building, chartering, repairing and maintenance of coastal vessels such as tugboats and barges.
Coastal Contracts, which is based in Sandakan, posted an after-tax profit of RM11.7mil on revenue of RM42.3mil in 2002.
The company's prospectus is expected to be issued by the end of this month and the listing of its shares is tentatively set for August.