This article first appeared in The Edge Financial Daily on November 1, 2017

KUALA LUMPUR: Gagasan Nadi Cergas Bhd, a building construction player, is seeking to list on the ACE Market of Bursa Malaysia to diversify into property development.

In its draft prospectus, Gagasan Nadi said it intends to issue 140 million new shares, equivalent to 18.6% of its enlarged share capital. Of this, 100 million shares will be allocated to selected investors by way of private placement, 20 million shares to the Malaysian public, and another 20 million shares to eligible directors and employees.

The group is also offering to sell 60 million existing shares, equivalent to 7.97% of its enlarged share capital, to selected investors via private placement.

The total amount of proceeds from the initial public offering and the issue price of the shares were not disclosed in the draft prospectus. The proceeds are earmarked for future property development activities, capital expenditure for the cooling system for the supply of chilled water to a shopping mall, besides working capital for a construction project.

“We intend to leverage from our competency in building construction to carry out property development business to expand our revenue stream”, said Gagasan Nadi in the document.

The group has identified three property developments, two of which are 1Malaysia Civil Servants Housing Project (PPA1M) developments within Kuala Lumpur and Selangor, and the other a mixed development in Putrajaya for the Asean Football Federation.

The group commenced business activities in 1995 as a contractor of building construction work under the name of Nadi Cergas.

Group managing director Wan Azman Wan Kamal and executive director Datuk Seri Subahan Kamal, a former Umno state assemblyman of Selangor, acquired shares in the group in 2000.

Gagasan Nadi is currently engaged in the construction of non-residential and residential buildings, mostly in public sector projects. Other than student hostels, government offices, campuses for public tertiary education institutions, aircraft hangars and training institutions, the company constructs buildings under government initiative programmes, such as PR1MA Homes (1Malaysia People’s Housing Programme), Rumah Selangorku, Felda housing and PPA1M programmes.