KUALA LUMPUR: Pekat Group Bhd, whose core business are solar photovoltaic (PV) and earthing and lightning protection (ELP), plans to raise RM44.38mil from its proposed listing on the ACE Market.
The company said on Wednesday it is issuing 138.70 million new shares or 21.5% of the enlarged share capital at an issue price of 32 sen per share.
Pekat said of the 138.7 million new shares, 32.2 million new shares or (5%) will be made available to the public via balloting; 16.1 million shares (2.5%) for its eligible directors and employees as well as persons who have contributed to its success.
The remaining 90.3 million new shares (14%) will be placed out to selected Bumiputera investors approved by Ministry of International Trade and Industry Malaysia and selected investors.
As part of its listing exercise, the shareholders is offering for sale 32.2 million shares to selected investors by way of private placement.
Based on the enlarged share capital of 645.0 million shares, Pekat is expected to have a market capitalisation of RM206.4mil.
Pekat plans to use RM18mil (40.6%) raised from the initial public offering (IPO) to build a new head office and for its factory as expands its operations to tap into the fast-growing solar PV industry.
Its new head office, with a total built-up area of 114,252 sq ft, will include its showroom, central monitoring station, training centre, workshop and warehouse.
The new head office -- which will showcase its solar PV facility business, integrated management, monitoring and assessment platform -- is expected to be completed and operational by December 2023.
Out of the remaining IPO proceeds, Pekat will use RM12.70mil (28.6%) for working capital including purchasing of materials for its projects such as solar PV modules, solar PV inverters and ELP products and accessories.
Another RM10mil (22.5%) will be used to repay bank borrowings while RM3.7mil (8.3%) to be used to defray listing expenses for the IPO.
Pekat Group managing director Chin Soo Mau (pic,above) was upbeat on the outlook for the IPO and expected the injection of new working capital would enhance its capability to secure more contracts, carry out more projects concurrently and provide more maintenance services.
“Some of the solar PV and ELP projects that we are involved in require tender bonds and performance bonds, which is normally a fixed sum that varies from tender to tender. This results in the lock-up of a portion of our capital during the duration of the project,thereby affecting our liquidity for that duration, ” he explained.
Chin said the increase in working capital would enhance Pekat’s liquidity and cashflow, “so that we will be in a stronger position to secure and complete more projects”.
The IPO is open for subscription from Wednesday to June 10 and its listing is tentatively scheduled for June 23.
The company’s substantial shareholders include Chin, and executive directors Tai Yee Chee and Wee Chek Aik, and Hextar Holdings Sdn Bhd.
Hextar is a major shareholder of Main Market listed Hextar Global Bhd. M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO.