Radium Development to raise RM434m from IPO

KUALA LUMPUR: Property developer Radium Development Bhd, en route to a listing on Bursa Malaysia’s Main Market on May 31, plans to raise RM434 million from its initial public offering (IPO) to reinforce its presence in the capital city.

At an issue price of 50 sen per share, the IPO entails an issuance of 868 million new shares. Upon listing, the group will have a market capitalisation of RM1.73 billion.

Of the 868 million new shares, 273 million shares will be made available to the Malaysian public, 60 million will be for its eligible key senior management, employees and business associates, as well as 435 million are earmarked for private placement to bumiputra investors approved by Ministry of Investment, Trade and Industry, while the remaining 100 million are earmarked for selected investors by way of private placement.

The group plans to use RM171 million (39.4%) for acquisition of landbank and/or development expenditure, and RM109.3 million (25.2%) for hotel construction. Notably, RM93.9 million (21.6%) is allocated for repayment of bank borrowings, while RM39.8 million (9.2%) will be utilised for working capital and RM20 million (4.6%) to defray listing expenses.

Meanwhile, group managing director Datuk Gary Gan Kah Siong (pix) said that the group has entered into a joint venture deal to potentially launch a development in Mukim Batu in the first half of 2024, and shortlisted three parcels of land in Mukim Petaling to acquire and/or jointly develop.

He added that the group will develop a gross development value (GDV) of RM1.5 billion worth of new launches in 2023. In Q3’2023, it will unveil its largest undertaking yet – Residensi Desa Timur in Salak South, with a GDV of nearly RM1 billion.

On its commercial-residential project The Chancery, he said: “When the hotel begins operations in 2026, this will form our recurring income stream, and reinforce Radium’s commitment to growing alongside thriving Kuala Lumpur and appeal to tourists,” he said during the group’s prospectus launch today.

He remarked that the group is focused on developing projects in the Kuala Lumpur city area and for the next five years, the group has no intentions of developing outside of the location.

“Kuala Lumpur has a lot of job opportunities and the transport networks keep on improving, which draws a lot of people to come to KL to own, rent or purchase properties. We believe that demand is still strong compared to other areas, that’s why at the moment we are still focused on KL,” he told reporters.

The group targets a distribution of no less than 30% out of its consolidated profits after taxation attributable to shareholders available in each financial year in the form of dividends to the shareholders annually, commencing from the financial year ended Dec 31, 2022.