Bina Puri mulls raising fund

KUALA LUMPUR (June 22): Bina Puri Holdings Bhd is considering making a cash call from investors via a rights issue to reduce its gearing to as low as 1.5 times, said its group executive director Datuk Matthew Tee.

“We are exploring options, maybe a rights issue, to lower our gearing. The last capital raising that we did was in 2003,” he told reporters after the construction and property group’s annual general meeting yesterday.

Currently, Bina Puri’s gearing ratio stands at three times.

With the listing of the group’s Indonesian subsidiary PT Megapower Makmur Tbk on the Indonesian stock exchange next month, Tee said the group’s gearing ratio is expected to be reduced slightly.

However, Bina Puri’s cash flow will still be tight due to the capital- intensive nature of its businesses, he added.

Megapower Makmur, in which Bina Puri owns a 80% stake, is involved in micro power generation, where it supplies micro power service to Indonesia’s state-owned power utility, PT Perusahaan Listrik Negara.

With the listing, Tee hopes to see an increased contribution by the power segment to the group’s bottomline by 20% per year.

Its power business currently contributes about 1% of Bina Puri’s revenue.

Going forward, Tee said the group will consider further expansion plans for Megapower Makmur in the near future.

“Seeing that the property market is very unpredictable now, the construction sector is still the best industry to be in,” Tee said, adding that the construction business will remain the group’s main revenue driver.

Bina Puri’s current unbilled order book stands at RM1.9 billion, which is expected to last till 2019. It also has a tender book of close to RM10 billion.

The property division also has various ongoing projects in the Klang Valley, Johor Bahru, Pahang, Sabah and Sarawak, with a combined gross development value of RM3.1 billion.

Meanwhile, Tee said the opening of the new Bandar Tasik Puteri (BTP) interchange on its concessionaire highway KL-Kuala Selangor Expressway will help to improve traffic performance and will serve the 60,000 population of BTP.

He added the group expects the highway, that was completed in 2011, to be profitable by 2020.

This article first appeared in The Edge Financial Daily, on June 22, 2017.

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