Expresses confidence in comfortable oversubscription of Rs. 500 m worth offer; keener to engineer long-term value.
It is the country’s first IPO for 2012 and comes amidst battered sentiments over investing in the stock market and but Access Engineering Ltd Chairman Sumal Perera is upbeat of success.
His optimism is understandable since the IPO value is only Rs. 500 million, whereas last week Access Engineering Ltd (AEL) invested Rs. 846 million to acquire a 60% stake in Sathosa Motors Plc, in addition to being open for a further Rs. 550 million exposure via the mandatory offer.
Rather than a dire need for new funds from the public, AEL is listing perhaps in compliance with its private placement via which Rs. 4.5 billion was raised mid last year as well as to get properly valued as a progressive company.
The 2012's maiden IPO also comes after some recent initial offerings and newly listed entities producing mixed results in a market which is still struggling with its elusive stability.
Whilst expressing confidence in comfortable oversubscription AEL Chief Perera yesterday emphasised he and his staff were more concerned about enhancing long-term value both at corporate and macro level on a sustainable basis.
“We are keen to create and deliver value on a sustainable basis over a long period. This is at company and country level. However, to be valued we must list,” said Sumal, who added that being a public quoted company also enhances transparency and accountability.
Priced at the same level of the private placement, AEL’s 20 million shares offering is at Rs. 25 each and officially opens tomorrow.
The private placement brought in several high profile institutional investors, boosting the stature of AEL, which began operations in 2011 and is the second largest player in the construction sphere.
As a goodwill gesture, Sumal along with co-founders of the Company Christopher Joshua and Ranjan Gomez gifted a 15% stake to over 1,000 employees, whom the Chairman described as the backbone of the organisation as well as the key driver of value creation into the future.
“During the past year we have focused on building and sharpening capacity and skills, which is key to our very strong project pipeline,” Sumal said.
AEL has identified Rs. 38 billion worth of projects over the next three years. These projects are funded by the Government projects, foreign banks and multilateral agents.
Having secured over 100 civil engineering projects countrywide since its inception, AEL remains confident of benefitting from the many proposed infrastructure development projects amid a booming construction industry in post-war Sri Lanka.
Proceeds from the Rs. 500 million IPO are to be utilised to part finance AEL’s working capital requirement for the design and construction of five residential buildings at Henamulla.
Moreover, funds are to be used to strengthen AEL’s identity through increased visibility and brand image among the public while simultaneously facilitating a listing on the CSE, allowing AEL to broad base public ownership.
source - www.ft.lk
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