KUALA LUMPUR: ACE Market-bound mechanical and electrical (M&E) engineering services provider West River Bhd, which launched its initial public offering (IPO) prospectus today, plans to expand its manufacturing capabilities with the development of a new facility in the Klang Valley,
The IPO is expected to raise RM27.9 million, of which RM10 million (35.84%) has been earmarked for the acquisition of land and construction of a manufacturing facility and warehouse in the Klang Valley.
Managing director Lim Yong Lai said the proposed facility, with an estimated built-up area of 35,000 square feet (sq ft), will accommodate expanded production space for electrical panels and distribution boards, and 25,000 sq ft of dedicated storage for M&E project-related inventories including cables, wires and spare parts.
“The new facility will allow West River to triple our annual production capacity over the next three years, strengthen supply chain efficiency, and enable bulk procurement directly from manufacturers, further reducing reliance on trading intermediaries and securing more competitive pricing.
“Our expansion into a larger facility is a strategic move to meet growing demand for our services while improving operational efficiency. This IPO marks a pivotal milestone as we scale our operations and unlock greater value across the M&E engineering sector,” he said at the prospectus launch.
Of the remaining proceeds from the IPO, RM5.6 million (20.07%) will be used for the repayment of borrowings to strengthen the company’s capital structure and improve gearing; RM7.8 million (27.96%) for general working capital, including workforce expansion and the purchase of materials for the manufacturing of electrical panels and distribution boards, and RM4.50\ million (16.13%) to cover estimated listing expenses.
West River’s IPO entails a public issue of 71.54 million new shares and an offer for sale of 35.77 million existing shares, priced at RM0.39 per share. The IPO values the company at RM139.5 million, with a price-to-earnings ratio of 12.19 times based on its FY 2024 profit after tax of RM11.46 million.
According to independent market research by Providence Strategic Partners Sdn Bhd, Malaysia’s M&E engineering industry is projected to grow from RM8.5 billion in 2024 to RM10.9 billion in 2026, underpinned by rising investments and increased construction activities across the residential, commercial, and industrial sectors.
Lim said the company is well-positioned to drive the company towards greater innovation, expansion, and long-term success in the M&E engineering sector. “This year will be significant for West River as we embark on our IPO journey for the listing on the ACE Market of Bursa Malaysia Securities.”
The application period of West River’s IPO commenced yesterday and will close on April 17 at 5pm. The company is slated for listing on May 5. M&A Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.
