Business Times

Access Engineering plans to go public in March

By Duruthu Edirimuni Chandrasekera

Access Engineering, which raised Rs 4.5 billion last July through a private placement, plans to make an initial public offer this March in a bid to exploit a post-war construction boom, officials said.
“Access Engineering issued 180 million new shares at Rs 25 per share which is an 18% stake to local and institutional and high-net-worth investors in July last year and we will issue a further 2% through an Initial Public Offering (IPO) by end February or early March - subject to regulatory approval," Sumal Perera, Chairman Access Engineering told the Business Times. He also said that the IPO prospectus will be out by end February.

Around 10 investors including John Keells Holdings, Carsons Group, MAS Holdings, Dhammika Perera's Vallibel One Ltd., the Associated Electricals Company and the Hirdramani Group subscribed to the private placement.

Mr. Perera noted that around Rs. 600 million will be used to retire bank loans and the balance to finance working capital for already contracted projects and part fund future investments, which include township and other infrastructure projects under public-private partnerships.

Mr. Perera added that 80% of the projects that Access Engineering handles are multilateral or bilateral donor funded, which gives security to a healthy cash flow situation for the company. Access Engineering’s order book is full for the next three years and these orders are Rs 30 billion worth.
Mr. Perera added that 50% of these orders are roads and bridges construction and water and flood retention, low cost housing along with piling constitutes the balance.

“With more projects in the pipeline as well as those which we are planning, we see good prospects especially in the construction industry. By injecting Rs. 4.5 billion through the private placement, our balance sheet is stronger to tap the high growth potential as well as launch new innovative projects," he explained. He said that around Rs. 600 million will be used to retire bank loans and the balance to finance working capital for already contracted projects and part fund future investments, which include township and other infrastructure projects under public-private partnerships.

Access Engineering was incorporated in 2001 and functions as the holding company of Access Engineering Group which includes a fully owned subsidiary, Access Realties (Pvt) Ltd (ARL). AEL carries out the group’s engineering business whilst ARL owns, Access Towers. The company has emerged as a leading entity in the engineering and construction arena by winning over 100 major civil engineering projects island-wide.

Access Engineering has also set sights on renewable energy and also property development sectors. “We feel that renewable energy is the way forward and the future because Sri Lanka is quite dependant on oil. The country can't take the economic impact of an oil price increase," Mr. Perera explained. While noting that Access Engineering is the only Sri Lankan owned construction and engineering industry/ sector firm to go public, he noted that Access Engineering is also one of the first local Greenfield firms to list.

He also said that Access Engineering has gifted 120 million shares (total value of Rs 3 billion) to its over 1000 employees. This gifting of shares to its employees together with the Rs 4.5 billion private placement are among the initiatives taken by the company to broad base the ownership of the company, Mr. Perera noted.

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