HE Group to raise RM24.33mil from IPO

KUALA LUMPUR: HE Group Bhd aims to raise RM24.33mil in proceeds from its upcoming initial public offering (IPO) for business expansion purposes.

The electrical engineering service provider, slated for a listing on the ACE Market of Bursa Malaysia on Jan 30, 2024, said RM15.13mil or 62.19% of the gross proceeds will be used to supplement the working capital requirements in tandem with the expected growth in the group’s business.

Meanwhile, RM3.65mil or 15% of the gross proceeds is earmarked for business expansion, including the growth of the group’s workforce, strengthening of its internal capabilities, and the establishment of two new offices in Kedah and Johor.

The group is also allocating RM1.75mil, representing 7.19% of the gross proceeds, for capital expenditure while the remaining proceeds will cover listing-related expenses.

With an enlarged share capital of 440 million and an IPO price of 28 sen per share, the group will have a market capitalisation of RM123.2mil upon listing.

HE Group managing director Haw Chee Seng said the group’s order book amounted to RM211.91mil as at Dec 15, 2023, which would keep the group busy until end-2024.

“Our track record in serving critical and high-value industries such as semiconductors, medical devices, and electronic product industries demonstrates our strengths and capabilities.

“Leveraging on this, we are confident in expanding our industry coverage to include data centres, a sector experiencing increased investments due to favourable government policies and sharing the critical need for high-quality power supply,” he said at the launch of the IPO prospectus,

The group also aims to expand its in-house capabilities to be an integrated mechanical, electrical and process engineering service provider, and establish new office in Johor and Kedah to capitalise on the foreign direct investments in both states.

The group’s IPO exercise comprises the issuance of 86.89 million new shares in HE Group, constituting 19.75% of the enlarged share capital.

Additionally, a private placement will be conducted for the offer-for-sale of 44 million existing shares, equivalent to 10% of the enlarged shares.

Out of the 86.89 million new shares, 22 million will be made available to the Malaysian public via balloting; and 11 million shares will be to eligible directors, employees and persons who have contributed to the success of the Group.

The remaining 53.89 million shares will go towards private placements to selected investors.

Following the prospectus launch, applications for the public issue are open from today and closed on Jan 18, 2024, at 5pm.