KUALA LUMPUR: Elridge Energy Holdings Bhd (EEH) launched its initial public offering (IPO) prospectus in conjunction with its listing on the ACE market of Bursa Malaysia.
The company has established itself as a key player specialising in the manufacturing and trading of biomass fuel products, with a focus on palm kernel shells (PKS) and wood pellets.
Biomass fuel products, namely PKS and wood pellets, can be used for electricity generation in power plants and as fuel in industrial boilers in various types of manufacturing-related industries.
Executive director and CEO Oliver Yeo said the increasing global push for renewable energy sources has led to a rising demand for biomass fuel products, particularly in the Asia Pacific.
He said Malaysia, with its abundant natural forestry resources and a strong agricultural sector fueled by fertile soil and a tropical climate, stands out as a major supplier of biomass fuel products such as palm kernel shells and wood pellets.
“The positive market outlook underscores the potential for biomass fuel products, which are recognised for their energy efficiency and environmental benefits, to contribute substantially to global energy needs and environmental goals,“ he said.
The IPO will offer 350 million shares of EEHB. This includes 80 million shares for the Malaysian public through a ballot, 20 million shares for eligible directors, employees, and contributors, and 250 million shares for Bumiputera investors approved by the Ministry of Investment, Trade and Industry.
An offer for sale of 350 million shares of EEH will be made available to selected investors via private placement.
Through the public issue portion of its IPO, EEH targets to raise approximately RM101.5 million, of which RM47.0 million will be utilised for the land acquisition and construction of a new factory and warehouse in Kuantan and RM21.1 million will be used for the purchase of
new machinery and equipment.
Meanwhile, RM27.0 million will be utilised as working capital.
The remaining RM6.3 million will be allocated to finance listing expenses.
Based on an issue price of 0.29 sen per share and enlarged share capital of 2 billion shares, EEH will have a market capitalisation of RM580.0 million upon listing.
According to Providence’s Independent Market Research report, the palm kernel shells industry in the Asia Pacific is forecast to grow at a compounded annual growth rate (CAGR) of 8.9% from an estimated US$308.6 million (RM1.4 billion) in 2024 to US$366.1 million (RM1.7 billion) in 2026.
The wood pellets industry in Asia Pacific is forecast to grow by a further CAGR of 8.6%, from US$10.6 billion (RM48.4 billion) in 2024 to US$12.5 billion (RM57.1 billion) in 2026.
“As a market leader in the production of high-quality biomass fuel products that reduce net greenhouse gas emissions, we are poised to capitalise on the burgeoning market for sustainable and eco-friendly renewable energy solutions.
“This listing exercise is crucial for EEH, as it presents a valuable opportunity to enhance our capabilities and further bolster our presence in the region.
“It also allows us to create value for our stakeholders and enables us to tap into a new customer base while maintaining our industry-leading position in terms of
product quality,“ Yeo said.
KAF Investment Bank Bhd co-head/director and corporate finance Ahmad Fazlee Aziz said the bank believes that EEH, through its subsidiary Bio Eneco Sdn Bhd, has the
capability to manufacture high-quality biomass fuel products required to become the leading player in the Asia Pacific market.
He said the IPO exercise will undoubtedly accelerate its growth and enhance its industry and corporate reputation even more.
Currently, EEH’s customers are based
in Asia Pacific, mainly comprising Malaysia, Singapore, Indonesia and Japan.
KAF Investment Bank is the principal adviser, sponsor, underwriter and placement agent for this IPO exercise.
