Kawan Renergy IPO oversubscribed by 94.99 times

KUALA LUMPUR: Kawan Renergy Bhd, slated for a listing on the ACE Market of Bursa Malaysia on May 29, has seen its initial public offering (IPO) oversubscribed by 94.99 times.

The engineering solutions provider has received a total of 23,636 applicants for 2.63 billion shares, worth about RM791.9mil for the 27.5 million shares allocated to the Malaysian public, representing an overall oversubscription rate of 94.99 times.

For the bumiputra portion, a total of 13,047 applications for 1.15 billion shares were received, representing an oversubscription rate of 83.12 times.

As for the public portion, 10,589 applicants were submitted for approximately 1.48 billion shares, resulting in an oversubscription rate of 106.86 times.

Meanwhile, 19.3 million shares made available for application by the eligible persons have also been fully subscribed.

Kawan Renergy’s IPO offers 144.5 million ordinary shares, including 110.0 million new shares representing 20.0% of the enlarged share capital.

With an issue price of 30 sen per share, Kawan Renergy is expected to raise RM33mil from its public issue. Additionally, there is an offer for sale of 34.5 million existing shares, or 6.3% of its enlarged share capital, by way of private placement to selected investors.

Managing director Ir. Lim Thou Lai said the strong response to its IPO reflected the capital market’s trust in Kawan Renergy’s capabilities and expansion strategy.

“We are well-positioned to capitalise on opportunities in the industrial process equipment industry, spurred by increasing demand for higher renewable energy and co-generation plants to enhance energy efficiency.”

“The majority of the proceeds, RM15mil or 45.5% of the proceeds raised, will be allocated for working capital to give us the financial flexibility to undertake more co-generation plant projects. Additionally, RM7.5mil or 22.7% will be allocated for the investment of a new 2 MW power plant and output improvements for the Bercham Plant. These investments directly target the growth of our power generation and electricity sales segment, enabling a more diversified income base that includes recurring income,’ he said in a statement.

Upon listing, Kawan Renergy will have a market capitalisation of approximately RM165mil based on the issue price of 30 sen per share and the enlarged share capital of 550.0 million shares.

M & A Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO exercise.