KUALA LUMPUR: As some observers may have wondered why local engineering, procurement, construction and commissioning group CMC Engineering Sdn Bhd (CMCE) is listing its telecommunications business on the Catalist board of the Singapore Exchange (SGX) instead of Bursa Malaysia, the group has come out to clarify that the move is purely a strategic choice.
“It (the listing) is natural to us [because] the business originated in there (Singapore). Most of our clients are there as well. It’s not because of any specific personnel that we are more in favour to work with [there],” the group’s chief executive officer Datuk Abdul Rahman Yusof told The Edge Financial Daily in an interview.
On Dec 15 last year, CMCE proposed to list its Singapore telecommunications network engineering business, CMC Communications Pte Ltd (CMC Comm), on Catalist.
CMC Comm — which is also a 50%-owned associate of Tee International Ltd — is principally involved in the provision of 3G and long-term evolution designs, engineering and installation works for mobile operators in Singapore, Thailand, and the Philippines.
Tee, which is listed on the Mainboard of SGX, is an engineering and integrated real estate and facilities management group.
Abdul Rahman, who will be the chairman of the upcoming listed outfit, said the group expects the prospectus for the initial public offering (IPO) to be finalised by mid-2015.
If everything goes according to the plan, he said the official listing date should fall within this year.
Proceeds from the IPO, he added, will be used to enable CMC Comm to strengthen its foothold in the telecommunications business in the countries it is already in.
CMCE’s decision to turn to SGX for its IPO came amid a lesser number of listings on Bursa lately.
New listings, which totalled 29 in 2010, slipped to 28 in 2011, then 17 in both 2012 and 2013, before declining further to 15 last year.
A check with the Companies Commission of Malaysia showed that CMC Communications Sdn Bhd (CMCC), which is the holding company of CMC Comm, posted a net loss of RM826,519 in the financial year ended May 31, 2013 (FY13) versus a net profit of RM13.67 million in FY12.
Abdul Rahman declined to provide the latest audited financials of CMCC as he deemed the information sensitive due to the ongoing IPO procedures of CMC Comm.
CMCE, on the other hand, registered a net profit of RM4.3 million in FY13, more than double its earnings of RM1.9 million a year ago.
When asked if there is any possibility of CMCE to be listed on Bursa, executive director Hazwan Alif Abdul Rahman said it was too early to tell at this juncture, but he did not rule out the possibility.
“Obviously the listing [of CMCE] is in the pipeline. However, it is still premature, [so] there is nothing to share at the moment,” he said.
One of CMCE’s more notable projects is the system works it undertook for the ongoing Kelana Jaya Light Rail Transit extension line worth RM673.9 million. More recently, it was awarded the RM7 billion Mecca Metro Phase One project in Saudi Arabia.
This article first appeared in The Edge Financial Daily, on March 23, 2015.