Construction player GDB Holdings seeks ACE Market listing

KUALA LUMPUR (Oct 13): GDB Holdings Bhd, a construction services provider which focuses on high-rise residential, commercial and mixed development projects, is aiming to be listed on Bursa Malaysia’s ACE Market to raise funds, mainly for capital expenditure (capex).

In its draft initial public offering (IPO) prospectus uploaded to the Securities Commission Malaysia’s website, GBD said it plans to allocate 63.7% of its IPO proceeds for capex, that is to buy new construction machinery and equipment, as well as a new office and land for storage in Selangor.

GDB’s IPO involves the issuance of 125 million new shares, of which 12.5 million will be made available to Malaysian subscribers, 15 million to eligible directors, employees and select contributors to the company, 25.625 million to identified investors, and the remaining 71.875 million to bumiputera investors via private placement.

Additionally, the group is offering 37.5 million existing shares for sale, also by way of private placement, to identified investors.

GDB, via its wholly-owned unit Grand Dynamic Builders Sdn Bhd, started its business in May 2013 and has completed three projects, namely parts of KL Eco City Project 1, building a pavilion and two serviced apartment show units for the BBCC Project, and as main contractor for the One Central Park Project at Desa ParkCity.

It is now controlled by its managing director Cheah Ham Cheia — previously the chief executive officer of Putrajaya Perdana Bhd — who holds an indirect 70% stake in the company via his private vehicle CHC Holdings Sdn Bhd, which will be pared down to 51.8% post-IPO.

As at Aug 30, GDB’s order book, comprising unbilled portions of four projects-in-progress, stood at RM695.97 million, which will be billed progressively over the next four financial years to 2020.

Among them is the more recent RM432 million contract it secured from Selangor Properties Bhd, for which it has been appointed main contractor to refurbish one 49-unit apartment block and to build one new 19-storey block of 105 apartment units, in Jalan Batai, Damansara Heights, called Aira Residence.

It has tendered for three other projects, comprising high-rise condominiums and commercial buildings in Kuala Lumpur, for RM1.28 billion.

In its financial year ended Dec 31, 2016 (FY16), GDB posted a net profit of RM14.24 million, up 183.2% from the RM5.03 million it recorded in FY15, which was about double the net profit of RM2.29 million it recorded in FY14. Revenue for FY16 grew 63.3% to RM276.91 million from RM169.54 in FY15, which was up 96% from FY14’s RM86.63 million.

Alliance Investment Bank is the principal adviser, sponsor, underwriter and placement agent for the IPO.

This article first appeared in The Edge Financial Daily, on Oct 13, 2017.

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