KUALA LUMPUR: Sabah-based major road infrastructure construction firm Azam Jaya Bhd is planning to raise RM61.5mil from its initial public offering (IPO), in conjunction with its scheduled listing on the Main Market of Bursa Malaysia on Nov 11, 2024.
The company said it will allocate RM8mil of the proceeds to boost its construction capabilities and operational efficiencies by acquiring new machinery and equipment as well as technological upgrades.
Addiitonally, it said RM28.4mil will be allocated for working capital, RM20mil for repayment of bank borrowings, and RM5.1mil will be used to defray listing expenses.
Azam Jaya, through its subsidiaries, specialises in the construction of large-scale road infrastructure in Sabah, including roads, highways, bridges, flyovers, and tunnels.
Executive director Datuk Lo Vun Che (Datuk Jessica) said the IPO is a pivotal step in its long-term growth strategy to enhance its construction capabilities and capacity to undertake more large-scale projects.
"We aim to further elevate the construction standards in Sabah, introducing innovative techniques and high-quality engineering to meet the growing demands of the region," she said at the launch of the company's IPO prospectus.
Inter-Pacific Securities Sdn Bhd is the principal adviser, sole underwriter and sole placement agent for the IPO exercise.
Commenting on the listing, the brokerage's head of capital markets and corporate finance Anuar Omar said Azam Jaya is well-positioned to solidify its position as a key infrastructure player and seize new opportunities in the growing construction industry.
In the financial year ended Dec 31, 2023 (FY23), Azam Jaya's revenue grew to RM280.8mil from RM231.5mil in FY21, representing a two-year compound annual growth rate of 10.1%.
Azam Jaya said it targets to distribute at least 30% of its net profit attributable to shareholders.
Applications for the public issue are open from today and will be closed on Oct 24, 2024, at 5pm.
