Sabah-based builder Azam Jaya files for Main Market IPO

• The proposed IPO involves a public issuance of 78.8 million new shares and an offer-for-sale of 50 million existing shares at a price to be determined later, according to its draft prospectus posted to the Securities Commission Malaysia. All in all, the listing would offer up to 26% stake in the company.

KUALA LUMPUR (July 10): Azam Jaya Bhd, a Sabah-based construction company, filed for an initial public offering (IPO) on the Main Market of Bursa Malaysia to raise funds to buy equipment and free up working capital to pursue larger projects.

The proposed IPO involves a public issuance of 78.8 million new shares and an offer-for-sale of 50 million existing shares at a price to be determined later, according to its draft prospectus posted to the Securities Commission Malaysia. All in all, the listing would offer up to 26% stake in the company.

“We intend to acquire construction machinery and equipment such as excavators, dump trucks, motor graders, bulldozers and staff vehicles such as light trucks,” Azam Jaya said. The company said it plans to spend about RM30 million until end-2025 to acquire construction equipment and staff vehicles.

The company has budgeted RM2.5 million until end-2025 to increase the number of construction vehicles equipped with autonomous vehicle control modules to nine vehicles as well as to purchase one drone and the first four sets of handheld augmented reality surveying equipment.

Azam Jaya mainly builds road infrastructure, including roads, highways, bridges, flyovers and tunnels in Sabah. The company is currently working on eight projects with an unbilled contract value totalling RM1.08 billion.

For the financial year ended Dec 31, 2023, the company reported a net profit of RM25.98 million on the back of revenue of RM280.77 million.

Azam Jaya ventured into industrial property development in 2015 through “The Factory @ Inanam” park with gross development value of RM89.38 million. The company, however, does not intend to undertake any property development projects in the future, Azam Jaya said.

Under the public issue, Azam Jaya will allocate 25 million new shares to the Malaysian public and 10 million shares to eligible persons. The company is also setting aside 43.8 million new shares to institutional and selected investors through private placement.

The company has also earmarked part of the proceeds as working capital to reduce the reliance on credit facilities for contractual obligations, as well as to partially repay bank borrowings. The rest will be used to defray listing expenses.

The offer-for-sale tranche meanwhile will be done through private placement to institutional and select investors. Proceeds from the sale of existing shares will accrue entirely to chairman Tan Sri Joseph Lo @ Lo Tain Foh and his son Datuk Jonathan Lo Chaw Loong, who is also Azam Jaya’s managing director.

Looking to buy a home? Sign up for EdgeProp START and get exclusive rewards and vouchers for ANY home purchase in Malaysia (primary or subsale)!