Binasat eyes ACE listing, to use proceeds to fund satellite, telco biz expansion

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KUALA LUMPUR (July 17): 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, Boon Aik and Bon Tiam 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 operations and maintenance services capability, improving its fibre optic network installation and commissioning service capability.

Binasat also said it is expanding its presence to 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, Maxis Broadband Sdn Bhd and Huawei Technologies Malaysia Sdn Bhd.

For the financial year ended June 30, 2016 (FY2016), 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%).

Independent market research firm Vital Factor Consulting Firm has estimated that Binasat's market share in the maintenance of satellite ground stations at petrol stations in Malaysia was at 58%.

For FY2017, 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 are subject to the discretion of our board," said the group.

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