KUALA LUMPUR (April 22): Reach Ten Holdings Bhd’s initial public offering (IPO) shares were oversubscribed less than two times by the public investors ahead of its Main Market listing.
The Kuching-based telecom services firm received 2,706 applications for 142.65 million shares, worth RM74.18 million from the Malaysian public, or just 1.85 times over the 50 million shares offered, according to a statement from Tricor Investor & Issuing House Services Sdn Bhd.
Reach Ten received 945 applications for 52.79 million shares, representing an oversubscription rate of 1.11 times, while demand for the remaining public portion was 2.59 times above the shares available. Shares set aside for eligible persons were fully subscribed.
Private placements of both new and existing shares were also taken up.
The notices of allotment will be posted to all successful applicants on April 28. Reach Ten is slated for listing on May 2.
At 52 sen per share, Reach Ten raised RM156 million from the IPO amid a worldwide market downturn.
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.
Meanwhile, the sale of existing shares grossed about RM52 million, which went entirely to Reach Ten managing director Leo 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.