KUALA LUMPUR (Jan 7): Instacom Group Bhd, which will soon change its name to Vivocom Intl Holdings Bhd, announced today that its recent private placement exercise had raised RM33.75 million from strategic investors.
It had previously announced that the exercise would involve up to 10% of its issued and paid-up capital or 323.42 million new shares, at an issue price of 25 sen each, and that the bulk of the proceeds would be for future viable investments and general working capital.
The placement proceeds would further contribute to its cash balance of RM37.99 million as at Sept 30, 2015, according to the company's announcement today.
Instacom joint chief executive officer Datuk Seri Dr Yeoh Seong Mok expressed his pleasure with the outcome of the placement exercise, "more so given that it happened at a time when the stock market is in turbulence".
He added that the encouraging take-up rate showed that investors who took up shares have confidence in the company's prospects.
The issuance price was at a discount of some 9.71% to the five (5)-day weighted average market price of Instacom shares up to and including Dec 16, 2015, the last traded day of Instacom shares immediately preceding the price-fixing date, of 27.69 sen per Instacom share.
Instacom has a strategic relationship with CRCC Malaysia, a subsidiary of China's construction behemoth China Railway Construction Corporation Ltd, and is their in-house contractor as well as their project delivery partner (PDP) in Malaysia.
Some of its more notable project wins recently include a RM116 million project in Gombak and two projects totalling RM378 million related to the 1Gateway project in Klang and 1Pavilion Hilltop in Mont Kiara, Kuala Lumpur.
These projects and the company's current order book are expected to give a strong earnings visibility until end-2017 and beyond, the company said.
"Besides the projects awarded to us, CRCC has also submitted biddings for various mega projects throughout Malaysia and Indonesia worth billions. Some of these projects are currently awaiting award outcomes, being in various and some in final negotiation stages," said Yeoh.
As such, Yeoh anticipates an exciting year ahead for Instacom.
"As the in-house contractor and PDP for CRCC, I am confident of winning more projects from the conglomerate in the event some of these mega projects are awarded to them," he added.
The company's other core business of high-end aluminium manufacturing is also currently growing strong, he noted.
Instacom shares closed 1.5 sen or 5% lower at 28.5 sen today, valuing it at RM705.45 million. It has risen about 159% in the past 12 months.
(Note: The Edge Research's fundamental score reflects a company's profitability and balance sheet strength, calculated based on historical numbers. The valuation score determines if a stock is attractively valued or not, also based on historical numbers. A score of 3 suggests strong fundamentals and attractive valuations.)