PETALING JAYA: Mechanical and electrical (M&E) engineering services and renewable energy solutions provider ES Sunlogy Bhd aims to raise RM42mil via an initial public offering (IPO) of 140 million new ordinary shares at a price of 30 sen apiece.
The company is set to debut on the ACE Market of Bursa Malaysia on Feb 20, 2025.
Upon listing, the group is expected to have a market capitalisation of RM210mil.
ES Sunlogy chief executive officer Teo Chee Teong said the group will continue to increase its market share in the M&E engineering industry, as well as participate and secure more solar projects in the near future, including the fifth large scale solar (LSS5) initiative.
He stated that by replenishing and growing its order book from the M&E engineering services, it allows ES Sunlogy to further enhance its revenue and increase its market share within the industry.
As of Dec 24, 2024, the group has submitted 103 tenders worth RM1.04bil, with decisions pending from its clients.
With an eye towards securing more solar projects, Teo said ES Sunlogy intends to work closely with partners in efforts to secure and deliver solar photovoltaic (PV) projects.
The company’s plan to participate in the LSS5 programme is also expected to generate recurrent revenue for the group.
These initiatives will be on top of its plan to develop the Selarong LSS PV plant in Kulim, Kedah.
Under the Corporate Green Power Programme, ES Sunlogy won the contract to develop the 29.99-megawatt LSS PV plant and is expected to commence works by December 2025.
On that note, ES Sunlogy will be allocating RM14.1mil or 33.6% of the proceeds raised from the IPO exercise to part finance the development and construction of Selarong LSS PV plant.
Additionally, the company has allocated some of the proceeds towards funding general working capital requirements and purchasing the enterprise resource planning (ERP) system at RM9.18mil and RM0.72mil, respectively.
The funding for general working capital requirements is said to be in tandem with the expected growth in its businesses and operations.
The purchase of the ERP system is expected to enhance the group’s operational efficiency in making better-informed decisions, leveraging advanced analytics and improving financial management.
The remainder of the proceeds will be set aside for the repayment of bank borrowings totalling RM14mil and estimated listing expenses at RM4mil.
When asked whether the group will be venturing into global markets, Teo said ES Sunlogy is open to any opportunities.
“Currently, our main focus is still in Malaysia.
“But if there is an opportunity, then we might look into expanding our business to overseas markets,” he said during a virtual press conference of ES Sunlogy’s prospectus launch yesterday.
As of the financial year ended July 31, 2024, ES Sunlogy posted a revenue of RM191.09mil with a gross profit of RM30.94mil.
The company’s upcoming IPO exercise involves an offer for sale of 70 million existing shares.
Post-IPO, ES Sunlogy managing director Khor Chuan Meng and executive director Chu Kerd Yee will hold a 21% stake in the company, down from the current 30%.
Meanwhile, former ES Sunlogy non-independent and non-executive director Datuk Keh Chuan Seng will be holding a 28% stake in the company.
Applications for the public issue portion of the IPO will close on Feb 5, 2025.
