Access Engineering launches Rs. 500 m IPO delivering new hope

Access Engineering Ltd., one of the country’s leading construction and engineering enterprises, yesterday formally announced plans to go for a Rs. 500 million Initial Public Offering (IPO), to partly finance the working capital requirements of a housing project to the value of Rs. 3 billion undertaken by the company on behalf of UDA.

Access Engineering Ltd., Chairman Sumal Perera addresses the launch of the company’s Rs. 500 m IPO – Pic by Nisal Baduge

Access Engineering would become the first construction company pioneered by Sri Lankan entrepreneurs to be listed on the Colombo Stock Exchange (CSE) and would be within the top 20 corporates listed in terms of market capitalisation at the share issue price of Rs. 25 per share. Access Engineering was also ranked No. 11 in LMD’s Most Respected Entities in Sri Lanka in 2011 and has one of the largest portfolios of international principals represented by a local firm. The company has also been involved in some of the largest infrastructure development projects in the country, funded by World Bank, Asian Development Bank, JBIC-Japan, SIDA-Sweden, DANIDA-Denmark and ECGD-United Kingdom etc. to date.

In June 2011, the company successfully completed a share issue to the value of Rs. 4.5 billion by placing 180 million shares at an issue price of Rs. 25 each, a 18% stake of the company post IPO. The founders of Access Engineering also gifted Rs. 3 billion worth of shares to its employees, a 12% stake of the company recently.

Through this IPO, the company will offer 20 million ordinary voting shares to the public at Rs. 25 each, amounting to a 2% stake of the company post IPO. The issue opens on 6th March 2012 and the latest closing date will be 15th March 2012 unless oversubscribed.

The minimum subscription amount would be Rs. 10,000 or 400 shares. The shares would initially be listed on the Diri Savi Board of the CSE and would then be transferred to the Main Board of the CSE upon meeting the requirement for “public holding available for trading”, subsequent to the unlocking of the abovementioned shares issued in June 2011. The Financial Advisors and Lead Managers to the issue are NDB Investment Bank Limited while John Keells Capital functions as the Co-Managers to the issue.

Speaking about the reasons behind going in for an IPO at this juncture, Access Engineering Ltd., Chairman Sumal Perera said: “While raising capital for expansion is one of the main reasons why companies go for a listing, we are no different.  I would also like to add that one of the key factors that we decided to broad base our ownership was also to separate the ownership from the management on the long term, while ensuring that the management will always be significant shareholders in the company.”

NDB Investment Bank CEO Darshan Perera said: “The Access Engineering IPO offers a unique investment opportunity for potential investors to join hands with one of the leading construction and engineering companies in the country. Access Engineering is poised to reap significant benefits from the numerous infrastructure development activities taking place in Sri Lanka, thereby creating immense value to the shareholders”.

To date, the company has been involved in a diverse range of construction and infrastructure projects in varied sectors such as roads and highways, bridges and flyovers, water and waste management, harbours and marine work, dredging and reclamation, telecommunication, irrigation and land drainage, piling and environment and waste management. Many of these projects have been of very high national priority in Sri Lanka’s attempt to improve its infrastructure to international standards.

Access Engineering has also partnered with world renowned construction companies, positioning itself as a leading entity in the engineering and construction arena by securing over 100 civil engineering projects island-wide. All the construction activities of Access Engineering are propelled through unique value engineering services, modern technologies and construction methods, thus enabling the company to augment its project infrastructure expertise.