KUALA LUMPUR (Jan 3): ACE Market-listed electrical and mechanical engineering company Kejuruteraan Asastera Bhd (KAB) is looking to raise RM7.14 million from a proposed special issue of up to 34 million new ordinary shares in the company to Bumiputera investors.

In a statement today, KAB managing director Datuk Lai Keng Onn said most of the proceeds from the exercise will be utilised to finance potential acquisitions and investments in businesses and assets that can help drive its electrical and mechanical engineering services further.

It was said that KAB is currently aiming to enhance its revenue stream and grow its market share through the acquisition of relevant and complementary businesses that will help expand the scale of its offerings.

"We see a lot of potential in growing our mechanical engineering segment, which focuses on air-conditioning and mechanical ventilation systems," Lai said.

"Concurrently, we hope to strengthen our presence in the area of maintenance services to further generate recurrent income that goes well beyond the completion of a project. These can be achieved quickly through clever acquisitions."

Upon successful completion of the proposed exercise, KAB said Bumiputera shareholders will hold at least 12.5% of the enlarged share capital of KAB, enabling the company to meet the Bumiputera equity condition imposed by the Securities Commission.

According to the statement, the gross proceeds of RM7.14 million was arrived based on an illustrative issue price of 21 sen per special issue share and assuming all 34 million shares are placed out.

The proposed special issue of new ordinary shares were approved by KAB shareholders at an extraordinary general meeting today.

"As we move forward into 2019, we remain upbeat on the health and vigour of Malaysia's construction sector. In spite of the prevailing macro-economic headwinds, demand for the type of services we offer continues to be strong," Lai added.

KAB closed unchanged at 20 sen today for a market capitalisation of RM64 million.