KUALA LUMPUR (May 7): Building construction services provider Siab Holdings Bhd has signed an underwriting agreement with M&A Securities and NewParadigm Securities Sdn Bhd for the group's rights issue with warrant exercise, aiming to raise RM91.98 million.
The rights issue with warrant is part of Siab's proposed private placement to raise RM103.98 million, announced last year. Of this amount, RM12 million has already been raised, completed on Dec 28 last year through a special share issue of 100 million shares to third-party investors.
This proposed corporate exercise aims to finance the acquisition of G7 contractor Taghill Projects Sdn Bhd.
To recap, Siab Holdings announced on July 18 last year its intention to acquire Taghill Projects for RM122 million, to be fully satisfied through a combination of RM96 million in cash and RM26 million via the issuance of 200 million Siab shares at 13 sen each to Taghill’s vendors Wong Yih Ming, Chu Yee Hong, and Yap Kek Siung, on the basis of 13 rights shares for every 10 shares held (13-for-10).
After deducting the RM96 million cash portion for the transaction, a portion of the remaining balance of RM4.1 million will be used for working capital and outstanding expenses for the proposals.
According to Siab Holdings, Taghill is a construction project and contract management consultancy company that has completed 12 major construction projects worth RM1.58 billion and has an order book of RM1.31 billion.
Currently, Taghill boasts a robust order book valued at RM1.31 billion and has committed to a profit guarantee of at least RM24 million for the financial years 2024 and 2025.
In a statement on Tuesday, Ng Wai Hoe, group managing director of Siab Holdings Bhd, said the move to acquire Taghill is designed to bolster the company's growth trajectory.
"The integration of Taghill into our operations allows us to leverage on each other’s specialties, significantly enhancing our company’s overall value and creating synergy for us to work together closely over a longer horizon," he said.
At 3.30pm on Tuesday, shares in Siab Holdings traded unchanged at 12.5 sen, giving the group a market capitalisation of RM73.7 million.