KUALA LUMPUR (Sept 12): Cheeding Holdings Bhd, a utilities engineering services firm, has launched its initial share sale that could raise up to RM75 million.
The initial public offering (IPO) on the ACE Market, priced at 36 sen per share, will raise over RM51 million for the company and another RM23 million for its selling shareholders, according to its prospectus unveiled on Friday.
Applications for the shares will close on Sept 23 and Cheeding is scheduled for listing on the ACE Market on Oct 7.
“We believe this IPO will give us the springboard to participate fully in Malaysia’s infrastructure growth story, as the nation gears up to support long-term economic growth and foreign direct investment-driven industries,” said chief operating officer Ng Lam Shein.
Cheeding, originally incorporated as Pembinaan Bukit Cheeding Sdn Bhd in December 1993 before adopting its current name in October 1996, mainly provides engineering, procurement, construction and commissioning of overhead and underground infrastructure for utilities.
The company is also involved in maintenance of overhead infrastructure, as well as substation engineering services and related activities. Based in Petaling Jaya, Selangor, Cheeding is registered with Construction Industry Development Board (CIDB) as a Grade G7 contractor. It is also registered with the Ministry of Finance, the Energy Commission as a Class A electrical contractor, and Tenaga Nasional Bhd (KL:TENAGA) as a supplier and service contractor.
Cheeding plans to allocate RM16.2 million, or about 48% of its IPO proceeds, to fund working capital such as material purchases, subcontractor fees, and other operating and administrative expenses.
A further RM16.2 million will be used to provide performance bonds in the form of bank guarantees to awarding parties for future projects. The rest will fund towards bank loan repayments and estimated listing expenses.
Under the public issue, Cheeding will allocate 39.86 million new shares to the Malaysian public and reserve 8.17 million new shares for eligible persons. The IPO also involves private placement of 67.77 million new shares to approved Bumiputera investors and another 27.2 million shares to select investors.
Managing director Ng Kian Chai and his spouse Tan Sook Hoi are putting up their existing shares for sale. Post-IPO, the couple will retain control of a 73.92% stake in the company.
Cheeding would have a market capitalisation of RM287 million upon listing. Based on the IPO price of 36 sen per share, the company will be valued at 10.9 times earnings for the financial year ended March 31, 2025.
The company reported a profit after tax of RM26.3 million on revenue of RM117.7 million for the year.
TA Securities is the IPO’s principal adviser, sponsor, underwriter and placement agent.