ENGINEERING solutions provider Kawan Renergy Berhad has entered into an underwriting agreement with M&A Securities in conjunction with its upcoming initial public offering (IPO) on the ACE Market of Bursa Malaysia Securities Berhad.
Kawan Renergy Group through its subsidiaries, Kawan Engineering Sdn Bhd and Kawan Green Energy Sdn Bhd 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.
Its 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.
Kawan Renergy’s IPO entails a public issue of 110.0 million new ordinary shares, representing 20.0% of its enlarged share capital, as well as an offer for sale of 34.5 million existing shares, or 5.3% of its enlarged share capital to selected investors by way of placement and 1.0% to selected Bumiputera investors approved by the Investment, Trade and Industry Ministry (MITI).
Out of the 110.0 million new shares, 27.5 million shares will be made available to the Malaysian public via balloting, while 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).
The remaining 63.2 million shares are reserved to selected Bumiputera investors approved by MITI.
Pursuant to the underwriting agreement, M&A Securities will underwrite a total of 46.8 million shares made available to the Malaysian public and the Pink Form Allocations.
“We are delighted with the signing of the Underwriting Agreement with M & A Securities, as it symbolises a step closer to our impending debut on the ACE Market of Bursa Securities,” Kawan Renergy managing director Lim Thou Lai said in a statement on Wednesday (April 3).
“This IPO exercise will expedite our expansion plans and allow us to tap into the equity capital market, granting us better financial flexibility to capitalise on the upcoming opportunities.”
Lim said the IPO proceeds will mainly be used as working capital to enable the Group to undertake more quality projects, moving up the value chain as well as to strengthen the company’s power generation and sale of energy business.
He also noted that the industrial process equipment industry continues to demonstrate promising prospects, supported by the improved demands of various sectors that utilise such equipment.
“Furthermore, increasing foreign direct investment (FDI) in Malaysia is set to boost our industrial process equipment, especially for sectors like oleochemical, food industries, utilities, oil & gas and sustainable fuel,” he remarked.
“The weakening of the Ringgit also helps make our products more competitive both locally and internationally.”
Kawan Renergy is scheduled to be listed on the ACE Market of Bursa Securities by the second quarter of 2024, with M&A Securities as the principal adviser, sponsor, underwriter and placement agent for its IPO. – April 3, 2024
