• RM576 Save up to RM288 with the Yearly Premium Plan (Limited Time Only)
  • RM480 Save up to RM240 with the Yearly Advanced Plan (Limited Time Only)
Subscribe Now
premium Subscription Plan
add free StockBiz
YouTube MS Production

Last Price Change Volume
Open: Day Range: Prev Close:


OTHERS ADVANCECON HOLDINGS BERHAD ("ADVANCECON" OR THE "COMPANY") VARIATIONS OF THE UTILISATION OF PROCEEDS RAISED FROM THE INITIAL PUBLIC OFFERING

ADVANCECON HOLDINGS BERHAD

Type Announcement
Subject OTHERS
Description
ADVANCECON HOLDINGS BERHAD ("ADVANCECON" OR THE "COMPANY")

VARIATIONS OF THE UTILISATION OF PROCEEDS RAISED FROM THE INITIAL PUBLIC OFFERING

Reference is made to the utilisation of proceeds raised from the IPO as disclosed in the Company’s prospectus dated 19 June 2017 that was issued in conjunction with the listing of the Company on the Main Market of Bursa Malaysia Securities Berhad on 10 July 2017 and the announcements dated 29 August 2018, 26 August 2020, 6 January 2022 and 18 December 2023 in relation to variations and extension of timeframe ("EOT") for the utilisation of proceeds raised from the IPO.

 

1. INTRODUCTION

 

After due deliberation, the Board of Directors (the "Board") of Advancecon wishes to announce that the Board has decided to vary the utilisation of proceeds ("IPO Proceeds") raised from the IPO.

 

2. DETAILS OF THE VARIATION FOR THE UTILISATION OF PROCEEDS

As at the date of this announcement, the Company and its subsidiaries ("Group") have a balance amount of RM12.81 million has yet to be utilised from the IPO Proceeds ("Unutilised IPO Proceeds"). After due deliberation, the Board has resolved to vary the Unutilised IPO Proceeds allocated for construction of new workshop of approximately RM12.81 million to working capital (“Variation”) as set as below:

 Details of utilisation

Allocation of IPO Proceeds upon listing(1)

Allocation of IPO Proceeds upon first variation

Actual utilisation of IPO Proceeds

Unutilised IPO Proceeds

Estimated timeframe for utilisation upon second and third variations

Revised timeframe for utilisation

 

RM’000

RM’000

RM’000

RM’000

 

 

Total Capital expenditures:

29,700

29,190

(16,385)

12,805

Within 78 months

Within 90 months (4)

(a)     Purchase of new construction machinery and equipment

15,100

15,100

(15,100)

-

Within 24 months

 

No change

 

(b)     Construction of new workshop

14,600

14,090(2)

(1,285)

12,805

Within 78 months(3)

Within 90 months (4)

Repayment of bank borrowings

12,500

12,455(2)

(12,455)

-

Within 6 months

No change

Working capital

10,700

11,255(2)

(11,255)

-

Within 24 months

No change

Estimated listing expenses

3,800

3,800

(3,800)

-

Upon Listing

No change

Total

56,700

56,700

(43,895)

12,805(5)

 

 


Notes:

 

(1) Based on the allocation of IPO Proceeds as stated in the IPO Prospectus dated 19 June 2017.

 

(2) On 29 August 2018, the Board announced to re-allocate RM0.51 million and RM0.05 million from the utilisation of construction of new workshop and repayment of bank borrowings, respectively, to the day-to-day working capital expenses for payment to suppliers. While the Company had not commenced the construction of the Kota Puteri Workshop (as defined herein), the Company had utilized RM1.285 million of the IPO proceeds earmarked for the Construction of New Workshop to finance the preliminary costs associated with the Construction of New Workshop such as professional fees, material costs  and other incidental expenses.

 

(3) On 26 August 2020, the Board announced to extend the estimated timeframe for construction of new workshop from within 36 months to within 54 months from date of IPO, up till 10 January 2022 and subsequently on 6 January 2022, the Board announced to further extend the estimated timeframe for construction of new workshop from within 54 months to within 78 months from date of IPO, up till 10 January 2024.

 

(4) On 18 December 2023, the Board announced to further extend the estimated timeframe for the utilisation of the balance IPO proceeds from 78 months to 90 months from from date  of IPO, up till 10 January 2025.

 

(5) The Company intends to utilise up to RM12.81 million from the unutilised protion of the Proceeds for Construction of New Workshop for working capital requirement of the Group to fund its new and on-going projects.

 

 

3.RATIONALE

 

As highlighted in the announcement dated 29 August 2018, the Company intended to construct its new workshop at Jalan Kota Puteri 6, Kawasan Industri Seksyen 6, Kota Puteri, Bandar Batu Arang, Daerah Gombak, Selangor ("Kota Puteri Workshop") due to the close proximity of the Kota Puteri Workshop to its major earthworks and civil engineering projects located at the districts of Gombak and Kuala Selangor and the Group's ongoing projects during then which were mainly located at the Selangor region.

 

However, as at the date of this announcement, the Company had not commenced the construction of the Kota Puteri Workshop, where the construction plan had been put on hold mainly due to the delay in obtaining the relevant authority approval as a result of the implementation of the movement control orders ("MCO") caused by the outbreak of COVID-19, which had also resulted in the disruption to the construction sector. In addition, pursuant to the completion of certain major projects (particularly the construction of Banting Interchange to South Klang Valley Interchange, the Assam Jawa Interchange to Tanjung Karang Interchange for West Coast Expressway and the Alam Perdana Development  in Kuala Selangor) which are located in close proximity to the Kota Puteri Workshop, after careful deliberation of the operational needs and the Group's ongoing projects which are located at various regions across Peninsular Malaysia (i.e. Perak, Pahang, Terengganu and Johor), the Board is of the view that the construction of the Kota Puteri Workshop may not be feasible to cater for the repair and maintenance of its machineries which are stationed in the construction sites located at various regions.

 

Accordingly, pursuant to the Board's due deliberation, the proceeds earmarked for the construction of the Kota Puteri Workshop could be better utilised to finance the working capital of the Group instead. For the avoidance of doubt, the Group will continue to rent workshop(s) located near to its ongoing project sites from third parties or to send its technicians to its project sites to perform the repair and maintenance services for its machineries moving forward.

 

As such the Board proposes to undertake a proposed variation to the utilisation of proceeds raised from the IPO.

 

The reallocation of RM12.81 million from the construction of new workshop to working capital will benefit the Group in the following manner:

 

i) The Group will be able to further expand its business via the increase in funds available for the solar and development projects; and

ii) The additional funds available will enable the Group to tender for additional projects as well as to execute additional projects concurrently.

 

4. INTEREST OF DIRECTORS' AND MAJOR SHAREHOLDERS' OF ADVANCECON AND ANY PERSONS CONNECTED TO THEM

None of the Directors and/or major shareholders of Advancecon and/or persons connected with them have any interests, direct or indirect, in the abovementioned Variation for the utilisation of the Unutilised IPO Proceeds.

 

5. STATEMENT BY THE BOARD

 The Board of Advancecon is of the opinion that the Variation for the utilisation of the Unutilised IPO Proceeds will not have any material effect on the financial performance of Advancecon and are in the best interest of the Company and its shareholders.

 

6. APPROVALS REQUIRED

The percentage of Variation for the utilisation of the Unutilised IPO Proceeds as compared to the total proceeds raised by the Company is 22.6%, which is less than 25% and does not constitute a material change to the utilisation of proceeds in accordance with Paragraph 8.22 of the Main Market Listing Requirements, therefore is not subject to any regulatory authorities and shareholders’ approval.

 

This announcement is dated 3 April 2024. 






Announcement Info

Company Name ADVANCECON HOLDINGS BERHAD
Stock Name ADVCON
Date Announced 03 Apr 2024
Category General Announcement for PLC
Reference Number GA1-25032024-00067



Close
New Feature
MS Academy
AI StockMaster. Beat The Market! Checking MS Signal
DETECT REAL-TIME STOCK MOVEMENT
X
(InvestorPro Plan Only)
Complimentary access on Premium Plan*
What is AI StockMaster?
Window Alert On-Screen Alert X
X