KUALA LUMPUR (Sept 5): Ho Hup Construction Co Bhd has proposed a private placement of up to 38.86 million new shares to independent third party investors to be identified at a later date, in a move to strengthen its position to bid for projects and increase its order book.

The proposed private placement will provide Ho Hup with additional funds to finance its working capital requirements for future construction projects.

In a filing with Bursa Malaysia today, Ho Hup said since its exit from Practice Note 17 status on May 5, the group has been actively bidding for new construction projects to re-build its order book.

“Currently, the board has identified certain projects which it believes the company has a high possibility of securing the award as Ho Hup is in late stages of bidding and negotiations for these projects. The estimated contract sums for the projects are between RM90 million and RM200 million, with commencement date for the said projects expected within the fourth quarter of 2014,” it said.

“Based on the three projects identified by Ho Hup which it believes has a high possibility of securing the award, the management estimates immediate working capital of RM63 million is required,” it added.

Ho Hup is of the view that the proposed private placement represents the most appropriate avenue to raise immediate funds for working capital given the quick time frame for completion of the exercise.

It also said the issue price of the placement shares will be determined and fixed by the board at a later date when all relevant approvals have been obtained for the proposed private placement.

The application to Bursa Securities in relation to the proposed private placement is expected to be made within one month from the date of this announcement.

Shares of Ho Hup closed down 2 sen or 1.34% at RM1.47 today, bringing a market capitalisation of RM455.07 million.