KUALA LUMPUR: Cable and wire manufacturer Southern Cable Group Bhd’s offer of 40 million new shares to the public under its floatation exercise was oversubscribed by 10.5 times.
Southern Cable said on Thursday it received 10,308 applications for 459 million shares with a total value of RM156.1mil.
It is set to be listed on the ACE Market of Bursa Malaysia on Oct 16 at 34 sen per share with market capitalisation of RM272mil.
Its public issue involved 209.34 million new shares including 40 million shares offered to the public of which 20 million units were allocated under the Bumiputera category and 20 million shares allocated under public category. It also offered for sale 20 million existing shares.
Southern Cable managing director Tung Eng Hai said the oversubscription from the Malaysian public indicated the strong interest in the group and is a vote of confidence to our business model and prospects as a proxy to the essential utilities sector in the country.
“Going forward, we intend to use the proceeds from the IPO to better position our group to grow alongside the recovery of the infrastructure segment, ” he said.
“This will sustain the group’s earnings till the financial year ending Dec 31,2022, ” he said.
“We will adopt a dividend policy to distribute at least 15% of our annual audited profit after tax attributable to shareholders as dividends, subject to business performance and recommendation of the board, ” Tung said.
Southern Cable manufactures cables and wires for use in various industry sectors including power distribution and transmission, telecommunications, building and construction, infrastructure, manufacturing and processing industries including oil and gas processing and petrochemical plants.
Of the RM71.2mil raised from the IPO, RM30mil would be for capital expenditure and expansion, while RM27.5mil will be used for working capital.
The balance proceeds comprise RM9.2mil for repaying bank borrowings and RM4.5mil for listing expenses.
MIDF Amanah Investment Bank Bhd is the principal adviser, sponsor, sole underwriter, and placement agent for the IPO exercise.
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