HE Group inks underwriting deal for ACE Market IPO

From left: Alliance Islamic Bank Bhd senior vice president, coverage & origination Lim Shueh Li, Alliance Islamic Bank Bhd chief executive officer Rizal IL-Ehzan Fadil Azim, HE Group Bhd managing director Haw Chee Seng and HE Group Bhd independent non-executive chairman Datuk Christopher Wan Soo Kee.

KUALA LUMPUR: HE Group Bhd has inked an underwriting agreement with Alliance Islamic Bank Bhd (AIS) in conjunction with its upcoming initial public offering (IPO) on the ACE Market of Bursa Malaysia.

HE Group, via its subsidiary, Hexatech Engineering Sdn Bhd, is an electrical engineering service provider, principally focused on power distribution systems for end-user premises such as industrial plants, as well as industrial and commercial substations.

Hexatech Engineering holds a Grade 7 Contractor registration with the Construction Industry Development Board (CIDB) and is recognised as a Class A Electrical Contractor by the Malaysian Energy Commission. The classifications allow it to undertake electrical installation projects in Malaysia without restriction on the size or value of a project.

HE Group’s IPO exercise will involve a public issuance of 86.88 million new shares, representing 19.75% of HE Group’s enlarged share capital, as well as an offer for sale of 44 million existing shares, or 10.00% of the enlarged shares via private placement to selected investors.

Out of the 86.88 million; 22 million will be made available to the Malaysian public via balloting; 11 million shares to eligible directors, employees and persons who have contributed to the success of the group (Pink Form Allocations); while the remaining 53.88 million shares will go towards private placements to selected investors.

In accordance with the terms of the underwriting agreement, AIS shall underwrite 33 million new shares, open for application by the Malaysian public and Pink Form Allocations.

"With access to the equity market, the fresh funds will expedite our growth and provide greater flexibility to execute our expansion plans and capitalise on upcoming opportunities,” HE Group managing director Haw Chee Seng said in a statement.

“Industry prospects remain favourable as Malaysia continues to benefit from a rise in local and foreign direct investments. Moreover, government initiatives and policies such as the New Investment Policy introduced in October 2022 are targeted at enhancing Malaysia’s attractiveness for high-value investments. This will lead to an increase in demand for power distribution systems at end-user premises, creating opportunities to enhance our market position further,” he added.