KUALA LUMPUR: Bintai Kinden Corporation Bhd has proposed a regularisation plan to restructure its operations, thus strengthening its financial position and securing future growth trajectory.
The company said the plan, which is subject to Bursa Malaysia and shareholders' approval at the upcoming extraordinary general meeting (EGM), is a pivotal step in its strategy to uplift its Practice Note 17 (PN17) status and ensure long-term sustainability.
A key component is the proposed diversification into the construction sector, which will complement its core mechanical and engineering (M&E) engineering business.
Bintai Kinden said the diversification will enable it to tap into growing opportunities within Malaysia's construction industry.
The plan also includes a proposed share capital reduction that will cancel up to RM160 million of issued share capital to eliminate accumulated losses and strengthen the company's capital base.
Bintai Kinden also plans a private placement of 244 million new shares, or 20 per cent of total issued shares, to raise up to RM19.5 million for improving working capital and balance sheet.
Additionally, the company proposed granting an option to its managing director and chief executive officer Datuk Tay Chor Han to subscribe for up to 146.4 million new shares, which is 10 per cent of the enlarged total shares after the placement.
The company is also introducing an employees' share option scheme (ESOS) for up to 15 per cent of total issued shares to incentivise and retain key personnel for its turnaround strategy.
Tay said the company is excited about the prospects that lie ahead, especially as it implements its proposed regularisation plan.
He added that this plan is not only a pathway to financial stability but also a strategic move to capitalise on the booming construction sector.
"The value of work done in the construction sector reached RM38.9 billion in the second quarter of 2024, with a 20.2 per cent growth rate, driven by civil engineering and residential building projects.
"We are well-positioned to benefit from this momentum through our diversification into construction, which we expect will significantly boost our revenue and contribute to more than 25 per cent of our profits in the near future."
He added that Bintai Kinden's focus on both the engineering and construction sectors aligns perfectly with the robust growth in civil engineering and residential buildings, which saw increases of 25.2 per cent and 19.7 per cent respectively.
With the regularisation plan and a strong market outlook, Tay said the company is confident in delivering sustainable growth and creating long-term value for its shareholders.
Bintai Kinden has restructured the banking facilities extended to its group of companies and has effectively rescheduled the majority of its debt obligations to creditors.
As a result, the company said it is now in a strong financial position, which is expected to further improve upon the approval of the regularisation plan.
The company expects to submit its proposed regularisation plan to Bursa for approval within a month.