KUALA LUMPUR: Engineering solutions provider Kawan Renergy Bhd, en route for a listing on the ACE Market of Bursa Malaysia Securities on May 29, 2024, aims to raise RM33 million from its initial public offering (IPO).
Its managing director, Lim Thou Lai said, the group intends to use the proceeds to capitalise on the future demand for industrial process equipment.
"We plan to allocate the majority of the IPO proceeds, amounting to RM15 million (45.5 per cent) to supplement the working capital requirements of our ongoing and future co-generation plant projects in tandem with the expected growth in scale of our business,” he said during the launch of the company’s prospectus here, today.
Lim said the balance would be used to purchase additional machinery worth RM500,000 (1.5 per cent), RM2.5 million (7.6 per cent) to improve the production output of the Bercham plant, a landfill biogas power plant in Perak and RM5 million (15.1 per cent) would be invested to construct a new two-megawatt (MW) biomass power plant to enhance the power generation and sales of its electricity business.
"The remaining IPO proceeds of RM10 million or 30.3 per cent will be allocated towards the repayment of bank borrowings and defraying of listing expenses,” he said.
Upon the listing, Kawan Renergy will have a market capitalisation of RM165 million, based on the enlarged issued share capital of 550 million shares and an IPO price of 30 sen per share.
The IPO exercise encompasses a public issuance of 110 million new ordinary shares, representing 20 per cent of its enlarged share capital, as well as an offer for sale of 34.5 million existing shares, or 6.3 per cent of its enlarged share capital by way of private placement to selected investors.
According to the prospectus, out of the 110 million new shares, 27.5 million will be made available to the Malaysian public via balloting.
The other 19.3 million shares are allocated for eligible directors and employees as well as persons who contributed to the success of the group (pink form allocations), while the remaining 63.2 million shares are reserved for selected bumiputera investors approved by the Ministry of Investment, Trade and Industry (MITI).
M&A Securities Sdn Bhd serves as the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.
Application for the IPO starts today and will be closed at 5pm on May 14. - Bernama