Kawan Renergy Bhd is now open to receiving applications from investors for its ACE Market initial public offering (IPO) debut aiming to raise some RM33 million.
The Engineering solutions provider’s IPO is priced at 30 sen per share and comprises a public issuance of 110 million new shares as well as an offer for sale of 34.5 million existing shares by way of private placement to selected investors.
Of the 110 million new shares, 27.5 million will be made available to the Malaysia public via ballooting, while 19.3 million shares are allocated for eligible directors and employees as well as persons who contributed to the success of the group.
Meanwhile, the remaining 63.2 million shares are reserved to selected Bumiputera investors approved by the Ministry of Investment, Trade and Industry. The applications for the public issue are open from Monday and will be closed on May 14, 2024 at 5pm.
The IPO offers investors a total of 26.3% of the company’s enlarged share capital that made a profit after tax of RM13.3 million on the back of RM98.4 million revenue for the financial year ended Oct 31, 2023.
Kawan Renergy, through its subsidiaries, is principally involved in the design, fabrication, installation and commissioning of industrial process equipment, process plants as well as renewable energy and co-generation plants. The company’s engineering solutions are applicable for a wide range of industries such as food processing, oleochemical, and chemical processing, oil and gas, waste recovery, power plant and utilities. The company is also involved in the power generation and sale of electricity business.
A total of RM15 million or 45.5% of the IPO proceeds will be allocated for working capital requirements of ongoing and future co-generation plant projects, while RM10 million (30.3%) will go towards repayment of bank borrowings and defraying of listing expenses.
Addityionaly, RM5 million (15.1%) will be invested to construct a new two-megawatt biomass power plant, with RM2.5 million (7.6%) earmarked to improve the production output of the Bercham plant, a landfill biogas power plant located in Perak, while RM500,000 will be used for the purchase of additional machinery to upgrade the company’s production processes.
Kawan Renergy is scheduled to be listed on the ACE Market on May 29. It’s aims to have a market capitalisation of RM165 million.
M&A Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.
