HSS revises balance of IPO proceeds utilisation 4 years after listing

HSS Engineers Bhd (HEB) which recently parted way with its group chief executive officer (GCEO) has sparked another surprise – a rather unprecedented revision of its balance initial public offering (IPO) proceeds by allocating RM15 mil to pursue opportunities within the green energy sector.

For the record, the engineering and project management consultant was listed on the ACE Market of Bursa Malaysia in August 2016.

“(The) HEB Group is currently exploring and evaluating new projects and opportunities in relation to the local renewable energy (RE) sector which includes solar and wind energy, waste to energy, small hydro and biomass/biogas plants,” the company pointed out in a media release.

“The group has participated in various RE tenders including the Net Energy Metering (NEM) for industrial factories or hypermarkets, Large Scale Solar @ MEnTARI (LSS) and small hydro projects in Malaysia.”

Of the balance RM18 mil in its IPO proceeds as of Dec 23, the group has increased the proposed portion for the recurring income and long-term contracts to RM15 mil from RM12 mil previously.

At the same time, it halved the allocation for expansion plans into India and ASEAN to RM3 mil from RM6 mil previously.

“We are revising the IPO proceeds to align our future plans with the Malaysian Government’s sustainability agenda and evolving regional landscape amidst the COVID-19 pandemic,” justified the company’s executive vice-chairman Tan Sri Kuna Sittampalam.

Moving forward, the group further noted that it plans to venture into tenders of various RE sources such as biogas, biomass, wind and solar energy which forms part of its arrangements within the power sector.

“This is in line with our government initiatives to grow the country’s current RE mix from 2% to a target of 20% by 2025 and reduce reliance on fossil fuel,” added HSS Engineering.

Parting way with GCEO

Nobody knows for sure if the decision to revise its utilisation of balance IPO proceeds has anything to do with the recent departure of its GCEO Datuk Nitchiananthan Balasubramaniam.

On Nov 23, HSS Engineers said the company and Nitchiananthan had entered into a mutual separation agreement. Nitchiananthan, who is also an executive director, had voluntarily resigned from all positions within the company.

Following the voluntary resignation, HSS Engineers said the company’s board of directors had decided to discontinue its investigations which had not conclusively determined the alleged misconducts by Nitchiananthan.

Earlier on Oct 27, HSS Engineers said it has appointed executive vice-chairman Kuna (who is also the company’s co-founder) as acting GCEO with immediate effect.

This follows the four-week suspension of Nitchiananthan effective the same date.

HSS Engineers said its board of directors had initiated the suspension of the GCEO to facilitate commencement of independent investigations into allegations made against him over his conduct in managing the company’s affairs but not pertaining to any breaches of fiduciary duty.

At the end of trading today, HSS Engineers closed down 5 sen or 0.82% at 60.5 sen with 693,700 shares traded, thus valuing the company at RM300 mil. – Dec 23, 2020

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