PETALING JAYA: Solar photovoltaic (PV) and earthing & lightning protection (ELP) specialist Pekat Group Bhd expects to raise RM44.4 million from its listing on the ACE Market of Bursa Malaysia Securities Bhd.
The company plans to use RM18 million or 40.6% raised from the initial public offering (IPO) proceeds for the construction of a new head office and operational facilities as it expands its operations to take advantage of the upcoming growth in the solar PV industry.
The new head office with a total built-up area of 114,252 sq ft will be an integrated facility with all the company’s facilities and serve as a showroom for the company’s solar PV facility business as well as its integrated management, monitoring and assessment platform once completed and operational by December 2023.
Under the listing exercise, Pekat is issuing 138.7 million new shares in Pekat representing 21.5% of the enlarged share capital at an issue price of 32 sen per share.
Of the 138.7 million new shares, 32.2 million new shares or 5% will be made available to the Malaysian public via balloting, 16.1 million new shares or 2.5% for its eligible directors and employees as well as persons who have contributed to the success of Pekat while the remaining 90.3 million new shares or 14% will be placed out to selected bumiputra investors approved by the International Trade and Industry Ministry and selected investors.
As part of its listing exercise, the existing shareholders of the company will also make an offer for sale of 32.2 million shares to selected investors by way of private placement.
Based on the enlarged share capital of 645 million shares, Pekat is expected to have a market capitalisation of RM206.4 million.
Pekat will further utilise RM12.7 million or 28.6% for working capital requirements in particular for purchase of materials for its projects such as solar PV modules, solar PV inverters and ELP products and accessories, RM10 million or 22.5% to repay bank borrowings while the remaining RM3.7 million or 8.3% to be used to defray listing expenses for the IPO.
Pekat managing director Chin Soo Mau said the increase in working capital will facilitate the company’s 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.
“The allocation to working capital is expected to enhance Pekat’s liquidity and cash flows, so that we will be in a stronger position to secure and complete more projects moving forward,” he said during its prospectus launch today.
The IPO is open for subscription from today to June 10. Pekat’s listing on the ACE Market of Bursa Securities is tentatively scheduled on June 23.
The company’s substantial shareholders include Chin, Pekat executive directors Tai Yee Chee and Wee Chek Aik, and Hextar Holdings Sdn Bhd.
M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO exercise.
