Fitters to raise up to RM63.8mil via listing of unit in S’pore

KUALA LUMPUR: Fitters Diversified Bhd is seeking to raise between S$20mil and S$25mil (RM51mil and RM63.8mil) from the initial public offering (IPO) of its renewable energy unit, Future NRG Sdn Bhd, in Singapore.

Fitters managing director Datuk Richard Wong said the funds would be mainly channelled into working capital. Future NRG is planned for listing on Singapore’s Catalist exchange in the last quarter of this year.

Earlier this year, it was reported that Fitters had engaged Singapore-based PrimePartners Corporate Finance Pte Ltd to fully sponsor the IPO.

The wholly owned subsidiary’s waste-to-energy business is making headway, having sealed a deal with a German biomass and coal gasification expert to bring the technology over to South-East Asia.

Future NRG has also signed a heads of agreement with AHT Services GmbH to manufacture re-engineered biomass gasification equipment based on AHT’s existing technology, and both parties will work to re-engineer the technology to suit the needs and raw materials in this region.

Under the agreement, both parties will operate and manage a joint-venture company, AHT NRG Sdn Bhd with a total paid-up capital of RM1mil, in which Future NRG and AHT will hold a stake ratio of 70:30.

Wong said the tie-up was a breakthrough for the group, which had been courting AHT for five years. “We will be working to replace the 5MW diesel plant in Sabah with biomass gasification in stages,” he said of its first renewable power project. He gave no revenue projection from the project, but said the potential to scale up the business was positive.

Fitters has purchased three biomass-gas generators from AHT for RM14mil to be deployed in the first quarter of 2015. The two generators with a capacity of 500KW each will be sited in Sabah, while another 200KW one will be deployed at Fitters’ current plant in Sendayan, Negri Sembilan.

The purchase will be funded by the initial share capital and internal funds, bank borrowings and potential grants from the Malaysian Investment Development Authority.

Wong said the group was starting with 1.2MW of capacity for existing end-users using diesel generators or to the national grid under the feed-in-tariff scheme.

He said although the technology would be first used in Malaysia sourcing oil palm biomass from local mills as feedstock, there were plans to, among others, sell re-engineered equipment to countries in the region.

“We’re looking at Indonesia, Thailand and the Philippines,” he said of the potential markets. “Even Singapore has four renewable energy plants that use its horticultural waste to generate energy.”

Wong said Fitters’ earnings outlook looked bright for 2015, as its endeavours in renewable energy and PVC-O pipe production came on stream. “We should be producing our first pipe by April next year. With all this coming on stream, we should think the group would do better next year,” he said.

Fitters’ current core business is still in selling fire-fighting equipment, and Wong said the group would not neglect its growth and expansion.

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