All proceeds from the IPO exercise, which involved the public issuance of 868 million new shares, will be channelled to the group.
There is no offer-for-sale component in the group’s IPO.
“All the money generated from this IPO goes towards growing the company. The promoters or substantial shareholders will not pocket anything from this exercise,” said the group’s managing director Gary Gan during the press conference today.
The new shares represent 25% of the group’s enlarged share capital at RM0.50 a piece.
The group’s current issued share capital consists of 2.6 billion shares, which will be enlarged to 3.47 billion following the IPO.
IPO proceeds to fund expansion
From the sum raised, RM171 million (39.4%) is earmarked for the acquisition of land banks for development expenditure, and RM109.3 million (25.2%) for hotel construction.
Both are slated to occur within 36 months of the listing.
The remaining funds will be used for the repayment of bank borrowings (RM93.9 million), working capital (RM39.8 million) and to defray listing expenses (RM20 million).
During the press conference, Gan revealed that Radium had entered into a joint venture agreement to potentially launch a development in Mukim Batu in the first half of 2024.
“In the third quarter of 2023, we will unveil our largest undertaking yet – Residensi Desa Timur in Salak South, Kuala Lumpur, with nearly RM1.0 billion DV (development value),” said Gan.
This undertaking would complement the group’s recent project, The Chancery, on Jalan Ampang that was launched in February 2023.
“The Chancery will notably include five floors of hotel, which we are allocating (the) RM109.3 million from our IPO proceeds to construct,” he said.
Out of the 868 million new shares to be issued, 273 million shares (31.5%) will be made available to the Malaysian public via balloting.
The lion’s share, or 435 million shares (50%), will be offered by way of private placement to “selected Bumiputera investors approved by the investment, trade and industry ministry”.
From the remaining shares, 60 million are offered to eligible senior management and 100 million for selected investors by way of private placement.
Radium targets to distribute no less than 30% of net profits to shareholders in each financial year as annual dividends.
A solid track record to build on
Radium is confident of achieving success in the future as many of its past projects have enjoyed full take-up rates for launched units.
Some examples of their past projects include the Vista OUG PPAM, Vista OUG Residensi Wilayah and Vista Semarak Residensi Wilayah affordable housing projects.
To date, the group has delivered projects with a gross development value of RM2.1 billion.
It holds 10% of the high-rise residential property market share based on 2021 revenue and 7% based on number of units.
“(The) majority of the homes we sell are priced between RM300,000 and RM600,000, which is affordable especially in Kuala Lumpur city,” said Gan.
“Our homes are conveniently (located) near amenities like LRT, MRT and schools, and enjoy good access to various highways, becoming an enticing pull for purchasers,” he added.
For the financial period ended 2022, the group posted a profit after tax of RM89.5 million.
Radium non-executive director Sydney Lim emphasised that the group’s discipline and focus differentiated it from other industry players.
“In September 2020 we launched a project and within four months we achieved 75% sales. How did we do it? Because we picked a good location,” he said.
“We sell products catered to the working class,” he added.
Lim and Gan emphasised that Radium had no plans to explore property development outside of Kuala Lumpur for the next five years.
Radium’s IPO will open today and close on Tuesday (May 16) at 5pm.
The group expects to list on the Main Market on May 31, 2023.