Wednesday, July 8

ACE Market-bound TCS to raise RM20.7 million from IPO to fund expansion plans

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Ir Tee (third right) with (from left) RHB Investment Bank Bhd chief executive officer Robert Huray, TCS independent non-executive director Datuk Seri Ir Mohamad Othman Zainal Azim, independent non-executive chairman Tan Sri Datuk Seri Izzuddin Dali, non-independent executive director Datin Koh Ah Nee, and independent non-executive director Ooi Guan Hoe at TCS’ prospectus launch.

KUALA LUMPUR: Building and infrastructure construction services provider, TCS Group Holdings Bhd (TCS) has successfully launched its prospectus today in conjunction with the group’s upcoming listing on the ACE Market of Bursa Malaysia Securities Bhd (Bursa Securities).

At the prospectus launch ceremony, TCS managing director Datuk Ir Tee Chai Seng said, “The launch of our prospectus marks another major milestone for TCS Group in our quest to be a listed company on Bursa Securities.

“We are confident the listing exercise will allow us to further strengthen our foothold in the construction industry as it enables us to gain access into the capital markets to fuel our expansion plans.

“Going forward, we have plans to further strengthen our presence in the high rise, purpose-built and institutional buildings segments, backed by our established track record in building construction projects.

“In addition, we will also broaden our revenue stream by venturing into infrastructure construction services to include major roads, highways and bridges. The proceeds from the Initial Public Offering (IPO) will certainly help accelerate in bringing these plans to fruition.”

On the group’s long-term prospects, Ir Tee opined that the long term prospects of the construction industry remained promising, notwithstanding the near-term challenges brought about by the outbreak of the Coronavirus Disease 2019 (Covid-19).

The optimism is underpinned by the implementation of various government measures and economic stimulus packages to strengthen the Malaysian economy.

“The progressive reopening of our economy from May 2020 following the Movement Control Order has led to resumption of construction activities. Initiatives by the Government such as, amongst others, the reintroduction of Home Ownership Campaign (HOC), removal of 70 per cent margin financing limit applicable for the third housing loan onwards for properties valued at RM600,000 and above, and stamp duty exemptions, coupled with the low interest rates environment are expected to invigorate the property sector.

“In addition, the government has reiterated its position to continue implementing large scale infrastructure projects which have high multiplier effects. These positive developments, in turn, will spur demand for the construction industry.

“With vibrant activities in the pipeline, we are confident of our future. We will work extra miles to execute our future plans with the ultimate goal of creating and delivering sustainable value for our stakeholders. As we embark on this exciting journey ahead, we look forward to welcoming new shareholders onboard with TCS Group – Together, We Build the Future,” he added.

TCS provides construction services for buildings, infrastructure, civil and structural works in Malaysia. Under building construction, the group has completed various types of residential and commercial buildings. A majority of TCS’ projects are located in Klang Valley (Selangor and Wilayah Persekutuan) and Negeri Sembilan. The group’s customers include SP Setia Bhd, IJM Corporation Bhd, United Malayan Land Bhd, Tropicana Corporation Bhd and Worldwide Holdings Bhd.

TCS will be raising approximately RM20.7 million from the IPO’s public issue, of which RM13 million or 62.8 per cent of total proceeds is earmarked for the purchase of new construction machinery and equipment within 36 months from listing; RM4.2 million or 20.3 per cent for working capital for construction projects within 24 months from listing; and the balance RM3.5 million or 16.9 per cent to defray the listing expenses within three months from listing.

The group’s IPO exercise entails a public issue of 90 million new shares representing 25 per cent of the group’s enlarged total number of shares, as well as an offer for sale of up to 18.0 million shares. The allocations of the 90 million new shares include up to 10.8 million shares for the Malaysian public via balloting (with at least 5.4 million set aside for Bumiputera investors); up to 7.2 million shares for eligible directors, employees and persons who have contributed to the success of the group; up to 32.4 million shares for institutional and selected investors by way of private placement; while the remaining 39.6 million shares to be placed out to identified Bumiputera investors approved by the Ministry of International Trade and Industry.

Upon listing on the ACE Market, TCS Group will have a market capitalisation of RM82.8 million based on the issue price of RM0.23 and its enlarged total number of issued shares of 360 million shares.