This article first appeared in The Edge Financial Daily on July 18, 2017

KUALA LUMPUR: Binasat Communications Bhd, which provides supporting services for satellite, mobile and fibre optic telecommunications networks, is seeking to list its shares on Bursa Malaysia’s ACE Market.

Binasat plans to issue 85.98 million new shares, equivalent to 33.1% of its enlarged share capital, according to the draft initial public offering (IPO) prospectus published on the Securities Commission Malaysia website.

The group added that its promoters, Na Boon Aik, 53, and his brother Na Bon Tiam, 44, will also be making an offer to sell 40 million shares, equivalent to 15.4% of the enlarged share capital.

Currently, the two brothers have an equal stake in Binasat. Post-listing, their holdings in the firm will be reduced to a combined 51.6%.

Binasat said the proceeds from the IPO would be used to set up a teleport, enhancing its operational and maintenance service capability, improving its fibre optic network installation and commissioning its service capability.

Binasat also said that it is expanding its presence into Myanmar, Vietnam and Laos by forming strategic partnerships and joint collaborations with local operators, such as telcos, equipment suppliers, and supporting service providers.

With a workforce of 283, Binasat — whose chairman is former Kuala Lumpur mayor Tan Sri Ahmad Fuad Ismail — derives the bulk of its revenue from two major customers, namely Maxis Broadband Sdn Bhd and Huawei Technologies Malaysia Sdn Bhd.

For the financial year ended June 30, 2016 (FY16), Binasat’s net profit grew 51.55% to RM7.17 million from RM4.73 million a year earlier, while revenue increased 17.75% to RM46.43 million from RM39.44 million.

The satellite business currently accounts for 50% of Binasat’s total revenue, followed by mobile support services (32%) and fibre optic telecommunications networks (18%).

For FY17, Binasat intends to distribute a dividend of up to 60% of its profit after tax.

“We propose to declare and distribute a second interim single-tier dividend prior to our listing. Our ability to declare and pay interim dividends as well as to recommend final dividends is subject to the discretion of our board,” said the group.

On May 26, Binasat said it had paid a first interim dividend totalling RM2 million.