SCIB plans Rm66.88mil private placement
Amount raised to fund ongoing and future projects
KUCHING: Sarawak Consolidated Industries Bhd (SCIB) expects to raise up to Rm66.88mil from a private placement to fund its ongoing construction projects overseas and future projects.
The company will issue up to 36.75 million new shares, representing up to 42.8% of the total shares of 85.88 million units, to interested directors and third-party investors, at RM1.82 per share.
Shareholders approved the proposed private placement at an EGM conducted fully virtual and via remote participation and voting on June 3.
They also gave the greenlight to resolutions on the proposed allocation of 6.1 million placement shares to SCIB chairman Datuk Mohd Abdul Karim and 5.75 million placement shares to managing director and chief executive officer Rosland Othman.
Also approved was the proposed new recurrent related party transactions (RRPTS) of a revenue and/or trading nature entered into between SCIB group of companies and Serba Dinamik Holdings Bhd group of companies. All the resolutions took immediate effect.
The RRPTS is related to the expectation of SCIB group to secure Rm1.37bil worth of projects from Serba Dinamik.
Mohd Abdul Karim is also group managing director/ceo and substantial shareholder of Serba Dinamik.
According to SCIB, Mohd Abdul Karim and Rosland would together subscribe for 11.85 million placement shares valued at about Rm21.57mil under the first tranche of the private placement. Currently, they own 40.82 million shares and 4.038 million shares respectively in SCIB, its traditional core business is in the manufacture of precast concrete products and industrialised building system (IBS) components that cater mainly for the Sarawak market.
The remaining placement shares will be for the subscription of third party investors, which include but are not limited to, the directors and/or shareholders of the company who wish to maintain the shareholdings in the company.
From the proceeds of the private placement, SCIB will utilise about Rm10mil for the group’s working capital for the on-going projects in the Middle East. These projects are the construction of nine residential villas in Oman, construction of 18 units of five-storey buildings, new boundary wall, guard house and car park bay in Doha, Qatar, construction of two units of service centre in Al Khor, Qatar and construction of 20 villas in Ruwi, Oman.
The last three contracts are worth a combined Us$200.45mil (Rm864.54mil) and which are all expected to be completed in the first half of 2021.
To finance future projects, SCIB intends to channel Rm55mil from the proceeds for this purpose. The company expects to secure several projects with total estimated contract value of Rm1.37bil over a period of 24 months to 36 months from Serba Dinamik under the approved RRPTS.
SCIB said the acceptance of the projects from Serba Dinamik involve the supply of precast concrete products and the provision of construction and project management services
“The acceptance of these projects will increase the revenue of the construction segment, of which the group’s manufacturing segment can also leveraged on, by providing complementary products, i.e. the IBS precast concrete components and reinforced concrete products in the construction-related projects, and the provision of civil construction and management services.
“The acceptance of these projects and the award of future projects on recurrent basis would enable the group to gradually expand its geographical presence to other regions, for instance, the Middle East region. Further the construction-related projects are in the ordinary course of business of SCIB group and these contracts will directly generate revenue for SCIB,” added the company.