(From left) Haily Group executive director See Swee Ling, Haily Construction director Kik Siew Lee, See and Haily Group chief executive officer and executive director Yoong Woei Yeh are seen for a photo op after the group’s prospectus launch.
KUCHING: Haily Group Bhd (Haily) aims to raise RM20.4 million from its upcoming listing on the ACE Market of Bursa Malaysia Securities Bhd (Bursa Securities) through an initial public offering (IPO) exercise.
Haily is principally a main contractor involved in building construction of residential and non-residential buildings in the Southern Region of Peninsular Malaysia, in particular, Johor and is also involved in the provision of rental of construction machinery.
Haily has completed approximately 65 building construction projects with a total contract value of RM1.29 billion since 2008. As a Grade 7 contractor with CIDB, this allows the group to bid and carry out any size of building construction projects irrespective of the contract value.
Haily’s clients include subsidiaries of public listed companies such as Mah Sing group of companies, Country View Resources Sdn Bhd, IOI group of companies, IJM Properties Sdn Bhd, as well as other private companies such as WB Land Sdn Bhd, Danau Homes Sdn Bhd and Connoisseur Food Generation Sdn Bhd.
Launching its prospectus yesterday, Haily said the IPO involved a public issue of 30 million shares at RM0.68 each which is expected to raise gross proceeds of RM20.4 million.
Of the 30 million shares, it is offering 8.92 million shares to the Malaysian public, 10 million to its eligible directors, employees and persons who have contributed to the success of the group, and 11.08 million to selected investors by way of private placement.
In addition, there will be an offer for sale by its promoter that involves 18 million existing ordinary shares in Haily by way of private placement to selected investors which is expected to raise gross proceeds of RM12.24 million. Its promoters are Haily Holdings Sdn Bhd, See Tin Hai and Kik Siew Lee.
Of the RM20.4 million to be raised from its public issue, Haily plans to use RM4.2 million (20.59 per cent) for purchase of construction machinery, equipment as well as new contract management and accounting software and office equipment, RM6 million (29.41 per cent) for working capital for construction projects, RM7 million (34.31 per cent) for repayment of bank borrowings, and the remaining RM3.2 million (15.69 per cent) as listing expenses.
“The listing exercise is an important next step which will increase the stature of our group, thus enhancing our reputation as we market our construction services and expand our customer base in Malaysia,” Haily founder and executive director See Tin Hai said.
“We are excited to provide an opportunity for investors and institutions to participate in our equity and continuing growth.”
Currently, Haily has 18 on-going building construction projects as well as two civil engineering related construction projects.
Its total secured contract value and unbilled contract value as at June 10, 2021 stood at RM460.04 million and RM249.58 million respectively. The ongoing projects are expected to be completed progressively between 2021 and 2023.
“The growth of the residential and industrial sector in other districts of Johor will provide opportunities for the group, and we have secured and unbilled contracts that can sustain us through the near-term challenges brought about 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.”
TA Securities Holdings Bhd (TA Securities) is the principal adviser, sponsor, underwriter and placement agent in relation to the IPO.
“The Malaysian economy in 2020 has weathered a challenging year amidst the pandemic,” TA Securities’ Corporate Finance head Ku Mun Fong said.
“However, with the strong fundamentals of the Malaysian economy, Bursa Malaysia Securities Bhd is able to weather challenges and is poised to grow in the long term.
“This augurs well with the listing of Haily Group Bhd on the ACE Market of Bursa Malaysia Securities Bhd.”
The group has an intention to distribute dividends of at least 30 per cent of its annual profits attributable to its shareholders upon completion of the listing. However, it is not a legally binding obligation or guaranteed commitment to the shareholders.
The listing exercise will help accelerate this, as well as enable them to purchase new construction machinery and equipment in anticipation of future growth.