AltX listing tomorrow for abe Construction Chemicals Limited

abe Construction Chemicals, one of South Africas oldest suppliers to the construction industry and the building retail sector, comes to the market tomorrow.

In an over-subscribed offer, the company raised R74 million ahead of the listing through the private placing of 37 million shares.

Stan Stacey, CEO, said that the motivation for listing the 75-year old company was not driven by capital requirements.  "abe generates sufficient cash to facilitate organic growth and support working capital requirements, he said.  Instead, he said the listing would enable the company's current non-active shareholders to exit the company, to enable current senior staff members to acquire a stake in the company and to provide a platform for future capital raising to facilitate abe's expansion and acquisition prospects.

Stacey said that while the strong growth in South Arica's construction industry would benefit the company abe had a history of sustained profitability that was testament to the soundness of its business model.

"Our two largest sources of revenue are derived from supplying to the construction industry (44%) and the hardware and building supply outlets (38%) with the rest going to exports and manufacturing.  The mix of these revenue streams as well as the supply of products for refurbishing buildings and structures has shielded the company from past construction cycle downturns," he said.