KUALA LUMPUR (April 9): Reach Ten Holdings Bhd is pushing ahead with its initial public offering (IPO) — the first Main Market listing for a Sarawak-based company in 15 years — against a worldwide market downturn.

At 52 sen per share, the Kuching-based telecom services firm’s IPO is raising as much as RM156 million, according to its prospectus unveiled on Wednesday. The IPO of Reach Ten will be the first for a Sarawak-based company since Sarawak Cable Bhd (KL:SCABLE) in 2010.

Application for the IPO will close on April 18, with the company scheduled for listing on May 2.

The global uncertainties are “beyond our control, but this IPO is part of Sarawak’s ecosystem for nation-building and growing its digital economy", said Danny Wong of M&A Securities advising Reach Ten on the IPO.

"We’re expediting capital market fundraising because our investors are confident in the long-term value,” he said during a virtual press conference after the prospectus launch. “This will allow Reach Ten to accelerate key state projects while the market eventually reflects its true worth.”

Reach Ten and WTEC Group Bhd, a foam and fabric products maker, are launching their IPOs on the same day. The IPOs come at a time when investors are bracing for sweeping tariffs that will come into force at 0401 GMT, or 12.01pm Kuala Lumpur time, hitting all US trading partners.

The FBM KLCI was down more than 30 points or over 2% at noon.

“We want to expand our fibre optic networks, enhance our satellite capacities and develop digital solutions to provide seamless connectivity across Sarawak,” said Reach Ten managing director Leo Chin.

More than half of the RM104 million estimated proceeds from the sale of new shares has been earmarked for the expansion and establishment of fibre optic communication network infrastructure.

Reach Ten is also setting aside RM25 million to construct an additional 100 telecommunications towers in Sarawak, particularly in the cities of Miri, Sibu and Bintulu, to support the state government initiatives.

The company also plans to use RM4.3 million to enhance its satellite-based communication networks and service capability by acquiring additional mobile and fixed satellite terminals, hardware and software as well as enhancing its facilities in the teleport.

The remainder of the proceeds will be used for working capital requirements, repayment of bank borrowings, and to defray the estimated listing expenses.

Reach Ten owns and operates a fibre optic communication network infrastructure in Kuching and Samarahan, spanning about 217km of infrastructure and 649km of cable link communication networks.

At the launch of the IPO, Sarawak’s Deputy Premier Datuk Amar Dr Sim Kui Hian said Reach Ten is an example of a private partnership with the government towards nation-building in Sarawak, and called for more private companies to list and increase visibility to investors.

Meanwhile, the sale of existing shares will gross about RM52 million which will accrue entirely to Chin, executive directors Lu Pak Lim and Wong Kiing Ting, and Eddryson Effe Kuehjin Anak Bika, who is a director at three of the company's subsidiaries.

M&A Securities is the principal adviser, underwriter and placement agent for the IPO.

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