Pretoria - Sea Kay Holdings, one of the largest builders of affordable mass housing in the country, will list on the main board of the JSE next week after privately placing 47.9 million shares at R1 each.
The firm will make an initial public offering of 478 million shares on August 16.
Corne Kruger, Sea Kay's chief executive, said the funds raised would be used to bolster working capital for ongoing expansion. The listing would facilitate acquisitions and enhance awareness of the company among investors and the general public.
Pieter van der Schyf, an executive director of Sea Kay, said its first acquisition after listing would be a "very big" transaction that would be finalised by the end of this year.
Attributable income is forecast to rise 44 percent to R61.4 million in the 12 months to June next year.
Kruger said the firm had a seven-year record of uninterrupted growth and a full order book for the next 12 months.
The black-owned Phatsima consortium led by entrepreneur Herman Mashaba owns a 25.1 percent stake in Sea Kay.
Van der Schyf said 70 percent of the consortium's shareholding was owned by broad-based shareholders and the balance by individual black shareholders.
Sea Kay's main activity is the provision of low-cost, affordable and bonded mass housing units to the government, banks, mines, property development companies and private clients.
Kruger said the group was involved in all the big ministerial housing projects, including Cosmo City north of Johannesburg, the N2 Gateway in the Western Cape and Olievenhoutbosch near Centurion.
The group is involved in other spheres of construction and property. Because of the critical importance of its supply chain, the group sources its own concrete, mortar, plaster and brick via subsidiaries.
Sedibeng Bricks in Meyerton manufactures about 3.5 million maxi concrete bricks a month, with about 80 percent of them for the group's own consumption.
Sea Kay is bullish about its prospects because the government has earmarked R39.3 billion of its infrastructure budget for affordable housing over the next three years and a further R8.2 billion in the three years thereafter.
This forms part of the government's drive to build 2.2 million new houses in the next seven to nine years.
Kruger said that if the group secured 10 percent of this market, which was achievable, Sea Kay would become a R1 billion annual turnover company.
Sea Kay director Mike Lomas, who recently retired as chief executive of listed construction company Group Five, said the government would have to continue spending in the affordable housing sector "to keep social peace".
Kruger said Sea Kay had adapted its low-cost housing products to comply with the government's recently altered preferred specifications.
He said the company had built 17 000 affordable housing units last year and anticipated this increasing to about 18 000 units this year.