AME Elite Consortium’s IPO oversubscribed by 4.39 times
KUCHING: Integrated industrial property solutions provider AME Elite Consortium Bhd (AME) has received positive response for its Initial Public Offering (IPO) on the Main Market of Bursa Malaysia Securities Bhd (Bursa Securities), with the public tranche of the IPO oversubscribed by 4.39 times.
AME received a total of 2,449 applications for 46 million shares with a total value of RM59.81 million versus the 8.54 million shares that were made available for application by the Malaysian public.
“The oversubscription from the Malaysian public indicates investors’ strong interest in our business model and prospects, as a proxy to growth in industrial properties alongside higher foreign direct investment (FDI) and domestic expansion in the country,” group managing director Kelvin Lee Chai.
“Our sizeable orderbook and unbilled sales provides earnings visibility till the second quarter of 2021. Coupled with ongoing efforts to meet incoming demand for industrial properties, we are optimistic of leveraging on the uptrend.
“Aligned with our desire to create shareholders’ value, we intend to adopt a dividend policy to distribute at least 20 per cent of our annual profit after tax attributable to shareholders (excluding any fair value gain), subject to business performance and recommendation of the Board.”
Apart from developing its own industrial parks under the ‘iPark’ brand in Johor, AME also designs and constructs large customised manufacturing plants and industrial buildings. The group has completed around 200 large manufacturing plants and industrial buildings in Peninsular Malaysia for various industries including steel, oleo chemical, oil and gas, electrical and electronics, consumer products, food and beverage, logistics and automotive, and more.
According to the Industrial Overview by Smith Zander, FDI inflows into Malaysia increased from RM38.2 billion in 2013 to RM80.1 billion in 2018 at a compounded annual growth rate of 15.98 per cent. This reflects investors’ confidence in Malaysia’s investment environment, which should favourably improve the demand for industrial properties and industrial construction activities, including industrial parks.
In addition, the total value of industrial property transactions in Malaysia was RM15 billion at the end of 2018 according to Smith Zander, and is forecasted to grow further to around RM16.4 billion by the end of 2020.
AME’s IPO consists of a public issue of 85.4 million new ordinary shares along with an offerforof 42.7 million existing shares, at an issue price of RM1.30 per ordinary share.
The size of the entire IPO deal amounts to RM166.6 million, of which AME aims to raise RM111.1 million primarily for business expansion, while the remaining RM55.5 million would go to the Selling Shareholders via an offer-for-sale.
From the proceeds raised for business expansion, RM69.1 million will be allocated for future industrial property development and investment projects, RM23 million will be utilised as working capital for the i-Park at Senai Airport City development, RM9 million will be set aside to complete the expansion of the Group’s precast concrete fabrication capacity, and the remaining RM10 million for the defraying of listing expenses.
AME is slated for listing on the Main Market of Bursa Securities on October 14, 2019.
CIMB Investment Bank Bhd is the principal adviser, managing underwriter, joint underwriter and joint bookrunner, while RHB Investment Bank Bhd is the joint underwriter and joint bookrunner for AME’s IPO.