KUALA LUMPUR: Haily Group Bhd (HGB), which has ongoing construction businesses in Johor Bharu and Kulai, has set plans to expand to other districts within Johor, as possibly venture outside the state in the near term.
Founder and executive director See Tin Hai said while the company is keeping prospects to venture out to other districts and states, it will, for now, will maintain focus on projects within the Johor area.
"Despite the current full Movement Control Order (MCO 3.0), we are still getting a lot of tender from the clients.
"We are experiencing a good sales record with our current ongoing projects here in Johor," he said at the company's virtual prospectus launch today.
With the current pace of vaccinations throughout the country and the expectation of the borders between Johor and Singapore to reopen, Sim said prospects for the company to secure new projects will improve.
Currently, HGB has 18 ongoing building construction projects, and two civil engineering related construction projects in progress.
The company's total secured contract value and unbilled contract value as of June 10, 2021, stood at RM460.04 million and RM249.58 million respectively.
"The project we have on hand will last until 2023. We have an unbilled order book of 250 million," said Sim, adding that the company is also bidding on numerous projects that are mainly landed residential, commercial and industrial projects.
En-route to be listed on the ACE Market of Bursa Malaysia, HGB aims to raise RM20.4 million from its initial public offering (IPO).
The company is issuing 30 million new shares at an issue price of 68 sen per share.
Of the 30 million shares, HGB is offering 8.92 million shares to the Malaysian public, 10.00 million to its eligible directors, employees and persons who have contributed to the success of the company, and 11.08 million to selected investors by way of a private placement.
In addition, there will be an offer for sale that involves 18.00 million existing ordinary shares in HGB via a private placement to selected investors which is expected to raise a gross proceed of RM12.24 million.
HGB plans to utilise RM4.20 million or 20.59 per cent from the IPO proceeds to purchase construction machinery, equipment as well as new contract management and accounting software and office equipment.
The remaining 29.41 per cent or RM6 million will be used for working capital for construction projects, 34.31 per cent or RM7 million for repayment of bank borrowings, and 15.69 per cent or RM3.20 million for listing expenses.
See said the listing is an important step to market the company's construction services and expand its customer base in Malaysia.
"The listing exercise will enable the company to purchase new construction machinery and equipment in anticipation of future growth.
"We are excited to provide an opportunity for investors and institutions to participate in our equity and continuing growth," he said.
On the long-term prospects of the construction industry, See said the growth of the residential and industrial sector in other districts of Johor will provide opportunities for HGB that can sustain the company through the near-term challenges posed by the Covid-19 pandemic.
"Taking into consideration our healthy cash position, expected profits to be generated from our operations, the amount that is available under our existing banking facilities and proceeds expected to be raised from the public issue, we will have adequate working capital to meet our present and foreseeable requirements as we continue to replenish and enlarge our order book to provide business growth," See said.