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Main Market-bound Tuju Setia aims to raise RM56m from IPO for growth plans

(From left): Tuju Setia directors Nor Adha Yahya, Datuk Wee Beng Aun and Datin Seri Raihanah Begum Abdul Rahman, Tuju Setia chairman Tengku Datuk Seri Ahmad Shah Alhaj ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Alhaj, Alliance Investment Bank CEO Michael Ng Chow Hon, Tuju Setia MD Wee Eng Kong, CIMB Investment Bank regional head equity capital markets and syndicate Maznee Kamaruddin, and Tuju Setia directors Wee Beng Chuan and Loo Ming Chee

(From left): Tuju Setia directors Nor Adha Yahya, Datuk Wee Beng Aun and Datin Seri Raihanah Begum Abdul Rahman, Tuju Setia chairman Tengku Datuk Seri Ahmad Shah Alhaj ibni Almarhum Sultan Salahuddin Abdul Aziz Shah Alhaj, Alliance Investment Bank CEO Michael Ng Chow Hon, Tuju Setia MD Wee Eng Kong, CIMB Investment Bank regional head equity capital markets and syndicate Maznee Kamaruddin, and Tuju Setia directors Wee Beng Chuan and Loo Ming Chee

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KUALA LUMPUR (April 26): Construction services company Tuju Setia Bhd, which is slated to be listed on the Main Market of Bursa Malaysia on May 19, is planning to raise RM56 million from its initial public offering (IPO) for its growth plans. 

In a statement in conjunction with its prospectus launch today, the company said its IPO involves a public issuance of 80 million new shares priced at 70 sen apiece, along with an offer for sale of 27 million existing shares.

Tuju Setia — the first company to be listed on the Main Market in 2021 — will have a market capitalisation of RM222 million upon the listing.

Of the targeted amount, RM32 million will be allocated for the group’s capital expenditure (capex) to purchase new construction machinery and equipment, and building information modelling (BIM) system software to upskill design and construction activities.

Additionally, the group will acquire land in the Klang Valley and construct new storage facilities for better organisation and utilisation of machinery and equipment, and improve efficiency of its maintenance works.

Meanwhile, a further RM19 million will be allocated for working capital, and the remaining RM5 million to defray listing expenses.

Speaking at a virtual briefing today, Tuju Setia managing director (MD) Wee Eng Kong said the IPO will enhance the group’s current core competencies as well as improve its capacity in constructing high-rise buildings, design and construction of hospitals and healthcare facilities.

As of March 2021, the group had secured four new contracts to build high-rise buildings, bringing its order book to RM953.1 million. With this, the group’s earnings will be sustained until 2024, according to Wee.

He said the IPO will ignite the group’s next growth chapter as the funds raised will be focused on enhancing its core construction competencies as well as undertaking new projects from its tender book of approximately RM4 billion.

The company’s order book comprises projects such as Mutiara Central Office Suites (Cheras), Riana Dutamas — Phase 2 (Segambut), The Pulse Residence (Bandar Puteri Puchong), 121 Residences (Petaling Jaya), PPAM Sofiya Residensi (Desa ParkCity), Emerald Hills — Phase 3 and 4 (Cheras), TUAI Residence (Setia Alam) and the Kajang Women and Children Hospital.

The group’s clientele includes reputable property developers, corporations and the public sector, including S P Setia Bhd, IJM Corp Bhd, Bandar Raya Developments Bhd, Perdana ParkCity Sdn Bhd, UEM Sunrise Bhd, Symphony Life Bhd, GuocoLand (Malaysia) Bhd and the Public Works Department (JKR).

“Undeniably, 2020 was not an easy-going year for the construction sector, no thanks to the Covid-19 pandemic and its aftermath. [But] with this combined order book and tender book, we have good fundamentals and a good start for this year.

“Notably, we will also be implementing a dividend policy to distribute 25% of our annual net profit to reward shareholders of Tuju Setia, and to show our appreciation of their confidence in our growth prospects,” said the managing director.

Of the 80 million new shares, 15.9 million shares will be made available for application by the Malaysian public via balloting, and 6.3 million shares will be made available for application by the group’s eligible directors, employees and persons who have contributed to the success of the group.

Another 31.7 million shares will be made available by way of private placement to selected bumiputera investors approved by the Ministry of International Trade and Industry (MITI).

The remaining 26.1 million new shares, together with 27 million existing offer-for-sale shares, will be placed out to selected investors by way of private placement.

According to the group, the applications for Tuju Setia’s IPO will open today and close next Wednesday (May 5) at 5pm.

Alliance Investment Bank Bhd is the principal adviser for Tuju Setia’s IPO exercise, as well as a joint underwriter and joint placement agent, together with CIMB Investment Bank Bhd.

Surin Murugiah