KUALA LUMPUR: Econpile Holdings Bhd has proposed a private placement of up to 133.7 million new shares to raise RM76.7 million.
The issuance represents a 10 per cent of Econpile's total number of issued shares.
In a statement today, the piling and foundation specialist said the indicative issue price of 57.35 sen was a 5.0 per cent discount to its five-day volume weighted average share price.
Econpile said the exercise would provide flexibility in allocating financial resources for its operations.
It said the proceeds from the private placement would largely be used to finance its working capital requirements.
This includes payment of trade and other payables, general administrative expenses and other operating expenses, as well as partial repayment of the group's banker's acceptances.
Executive director and group chief executive officer Raymond Pang said the exercise would position the company's balance sheet towards longer-term sustainability and to be ready for the construction industry's eventual recovery.
"The widespread impact of Covid-19 is unprecedented, but we recognise that it is a test of the fittest players.
"The construction sector is anticipated to see an uptrend in the long run as public and private sector projects come onstream in the crucial transport and property sectors to support the nation's development," he said.
Illustrating this, Econpile remained competitive in the industry, having won more than RM300 million in new contracts in the last financial year ended June 30, 2020 (FY20), and intended to extend its 33-year track record.
Econpile secured RM314.9 million of contracts in FY20, most notably a RM104.5 million job to undertake reinforced concrete works for a seven-storey retail podium of Pavilion Damansara Heights Phase 2.
As at June 30 this year, the group's orderbook stood at RM670.0 million, providing earnings visibility over the next 15 months.
Among its prominent projects are works for Pavilion Damansara Heights, LRT3 – Package GS04, TNB mixed development and Terra Putrajaya Project.