Eversendai to bid for RM1b-RM1.5b projects

KUALA LUMPUR: Soon-to-be-listed structural steel construction and engineering company Eversendai Corp Bhd aims to bid for an additional RM1 billion to RM1.5 billion worth of projects for the rest of the year, after having secured almost RM350 million so far this year.

Its executive chairman and managing director Datuk A K Nathan said the amount was not a problem to be achieved by the company, based on its reputation as one of the most sought after specialised contractors in the world, having completed over 100 projects in 11 countries the Middle East, Singapore and Malaysia.

As at May 16, the company's order book has grown to RM1.4 billion.

"We expect to win a fair number of jobs this year. Winning about RM1 billion to RM1.5 billion is not a problem for us. We already have several show projects in the pipeline... we have performed very well even during the most difficult period," he said, referring to the fact that the company's revenue grew by 4.3% during the global economic crisis and also the Dubai financial meltdown.

For FY10 ended Dec 31, Eversendai posted a net profit of RM116.7 million versus RM77.9 million the year before, although its revenue was lower at RM744.9 million compared with RM817 million previously.

Apart from the existing market, it aims to venture in a big way into other emerging markets such as India, Indonesia and Vietnam. This is due to the growing need for infrastructure development in these countries and it posed a big opportunity for Eversendai, according to Nathan.

"India is a very large market. As you know, the Indian government has projected that the country needs 950,000MW of electricity power by 2030. So there's a huge need for power plants in the country," he told the media at the launch of the company's initial public offer prospectus (IPO) on Wednesday, June 15.

According to Nathan, Eversendai is currently working on the construction of four power plants in India.

The company has bid for several power plant projects in Indonesia and Vietnam, while it is also bidding for an iconic high-rise building in Vietnam but he declined to elaborate further.

To support the company's steel needs in India, Nathan said the company had procured 30 acres (12ha) of land, with an option to extend to another 10 acres to build its steel fabrication plants there. The plant would be ready in 18 months, and would cost RM83 million that would be funded via the IPO proceeds.

On the company's extensive exposure in the Middle East, a region that has been plagued with political turmoil and civil war, Nathan said that the company's operation there is limited to selected countries that are politically stable and provided tremendous growth opportunities for the company, namely the UAE, Qatar and Saudi Arabia.

Eversendai is expected to make its debut on the Main Market of Bursa Malaysia on July 1.

The IPO consists of 232,190,000 ordinary shares of 50 sen each or 30% of its paid-up capital, comprising a public issue of 160.7 million new shares to institutional investors at the price to be determined by the book-building exercise, and the offer of 71.5 million existing shares, of which 41.3 million shares are for institutional and selected investors, while 30.1 million for the public and eligible directors plus employees at retail price of RM1.70 each.

The initial offer is expected to raise RM273.2 million, with RM126 million be set aside for capital expenditure including the new fabrication plants in India and to purchase plant and machineries for its Middle East operations, as well as enhance its production capabilities of its existing fabrication facility in Rawang.

Another RM80 million will be reserved for business expansion such as EPC and to advance its leading position in UAE and Qatar. The company also plans to expand into other Middle East countries such as Saudi  Arabia and Oman in the near future.