KUALA LUMPUR: Underground utilities and substation engineering specialist MN Holdings Bhd (MNHB) aims to raise RM17.2 million from its listing exercise and intends to secure more large-scale solar substation projects to strengthen its engineering services and solutions business segment.
The initial public offering (IPO) is open for subscription from today until April 15, 2022, with an ACE Market listing on Bursa Securities scheduled for April 28, 2022.
Managing director Loy Siong Hay said MNHB, with15 years in the power utilities construction industry, plans to enhance its machineries and equipment to expand its scale of projects, venture into other underground utilities engineering segments, namely piped water and sewerage distribution, and assembly of neutral disconnectors for sales and distribution in Malaysia.
“The purchase of additional machineries will enable us to have better cost control and estimates when bidding for construction projects and it will also enhance our flexibility in managing projects,” he told a virtual press conference today.
“With the reopening of our international borders and post-COVID-19 pandemic, foreign direct investments (FDIs) are expected to increase, and this will lead to more jobs (for us),” Loy said, adding that MNHB's customers are mainly factories.
“This will boost the overall manufacturing sector, and given our track record with various private and public utilities companies in power, gas, sewerage and telecommunications, this will put us in a better position when tendering for new projects.”
Out of the RM17.2 million the company aims to raise, Loy said 34 per cent (RM5.84 million) will be allocated to capital expenditure for machineries and equipment purchases for the next two years, 23.3 per cent (RM4 million) to repay bank borrowings, 25.2 per cent (4.33 million) for general working capital, and 17.5 per cent (RM3 million) for listing expenses.
MNHB is issuing 81.75 million new shares, which represents 20.0 per cent of the enlarged share capital at an issue price of 21 sen per share, bringing its market capitalisation to RM85.84 million on listing, based on the enlarged share capital of 408.75 million shares.
As at March 9, 2022, MNHB has completed 375 contracts, with a cumulative value of RM261.0 million, in the underground utilities and substation engineering services and solutions segments.
It also has 174 ongoing projects with contract value of RM258 million, of which RM126.0 million yet to be billed.
On the company's financial performance, M&A Securities Sdn Bhd deputy head of corporate finance Danny Wong said MNHB has a healthy revenue growth of 122.6 per cent over the past four years, from RM51.8 million in the financial year 2018 (FYE2018) to RM115.2 million in FYE2021.
M&A Securities is the adviser, sponsor, underwriter and placement agent for the IPO exercise.
“The company boasts a commendable order book which stands at RM172.2 million, comprising RM135.4 million from its underground utilities engineering services and solutions segment, and RM36.8 million from the substation engineering services and solutions segment.
This ensures MNHB is able to continue generating sustainable revenue, (its order book) becomes a vital component of its earnings abilities to facilitate the company’s cash flow, Wong said.
Its wholly-owned subsidiaries, Mutu Nusantara Sdn Bhd and MN Power Transmission Sdn Bhd are registered as Grade 7 contractors with the Construction Industry Development Board, respectively for building, civil engineering, and mechanical engineering. - Bernama
