KUALA LUMPUR: En route to a listing next month, Gas Malaysia Bhd has budgeted up to RM140 million this year to improve its gas supply security and infrastructure, including expanding its pipeline networks, in anticipation of an increase in gas demand from consumers.
Its managing director and chief executive officer Datuk Muhamad Noor Hamid said the plans will be financed with internal funds.
"In actual fact, this year /1140 we expect to spend between RM130 million and RM140 million for pipeline expansion, in preparation for the upcoming commencement of the regasification plant in Malacca.
"Those funds will be available internally. At the moment, we don't need to raise any more fund," he told reporters after the launch of Gas Malaysia's prospectus here yesterday. Slated for listing on June 11, Gas Malaysia expects to raise RM734.45 million from its initial public offering (IPO).
For subsequent years, Muhamad Noor said Gas Malaysia's capital requirement will not be that "big" as it tapers down to between RM30 million and RM40 million a year.
"It's not going to be big because we have signed with Petronas an additional supply of gas for a three-year period, and the bulk of our capital requirement, as far as infrastructure facilities are concerned, we will develop it this year.
"Thus, at the moment we don't need to raise additional fund, at least for the next three or four years," he said.
On its pipeline network expansion, Muhamad Noor said the company will build additional 70km to 90km of pipeline to complement the existing 1,800km network in Peninsular Malaysia.
"A couple of this pipeline will be built to connect new areas such as Padang Terap, Kedah, and Chuping (Perlis), Mantin (Negeri Sembilan) and also Kerteh, Terengganu.
"This will also depend on the amount of gas that we have. As to date, we have already booked with Petronas for 2013 which has been earmarked for customers who are willing to pay the new gas tariff," he said.
Meanwhile, Maybank Investment Bank Bhd chief executive officer Tengku Datuk Zafrul Tengku Abdul Aziz said he is confident of the success of Gas Malaysia's IPO despite the uncertainty in the market.
The IPO comprises an offer for sale of 303.315 million shares to institutional and selected investors approved by the Ministry of International Trade and Industry at a price to be determined via book building.
The remaining 30.525 million shares will be offered to the general public, eligible directors and employees of Gas Malaysia at RM2.20 per share.