Bina Puri considering rights issue to reduce gearing
KUALA LUMPUR: Construction player Bina Puri Holdings Bhd is mulling over a rights issue to reduce its gearing.
Executive director Datuk Matthew Tee Kai Woon said the company was studying various options to reduce gearing to “a comfortable 1.5 times” from the current three times.
“Our current market capitalisation is RM109.54 million, our construction order book is RM1.9 billion and our total gross development value is RM3.5 billion.
“So, we are very much under-capitalised. There will be several corporate exercises to address our gearing issue, and one of them would be a rights issue,” he said after the company’s annual general meeting in Selayang yesterday.
Tee said the company’s gearing would be reduced slightly after the listing of its power unit PT Megapower Makmur Tbk, next month.
But the group’s cash flow would still be tight due to the capital intensive nature of its businesses, he added.
Tee said Bina Puri expected PT Megapower’s bottom line contribution to increase between 20 and 30 per cent this year.
PT Megapower is an 80 per centowned subsidiary of Bina Puri Power Sdn Bhd, which in turn is 80 per centowned by Bina Puri.
Bina Puri is in the final stages of the listing and expects the exercise to boost the group’s power supply division and Bina Puri Power’s presence in Indonesia.
“Post-listing of PT Megapower, we will be looking at other areas within the power sector for growth in Indonesia,” said Tee.
As a micro power generation outfit, PT Megapower is involved in leasing and operating, including maintenance, of diesel engine generators and mini hydro power plants to generate electricity for
There will be several corporate exercises to address our gearing issue, and one of it would be a rights issue. DATUK MATTHEW TEE KAI WOON Bina Puri Holdings Bhd executive director
state-owned PT Perusahaan Listrik Negara.
For the financial year ended December 31 2016, Bina Puri posted total revenue of RM1 billion, a slight dip from RM1.2 billion registered in 2015. Its pre-tax profit stood at RM26.8 million against RM35.7 million in 2015.
The company’s order book stands at nearly RM3.1 billion, which will last between two and three years.
Its total unbilled projects stood at RM1.9 billion as at last year.
Its tender book roughly stands at RM10 billion, with a 20 per cent success rate. John Gilbert