Solar photovoltaics (PV) and earthing and lightning protection (ELP) firm, Pekat Group Bhd is expected to raise RM44.4 million through an initial public offering (IPO) on the ACE Market, Bursa Malaysia.
Its managing director, Chin Soo Mau, said of the total revenue, it planned to use RM18 million or 40.6% to build new headquarters and operating facilities in line with operational expansion efforts to capitalize on the future growth of the solar PV industry.
“The new headquarters, with a built -up area of 114,252 square feet, will be an integrated facility with all company facilities under one roof, including headquarters, showroom, central monitoring station, training center, workshop and warehouse.
"The headquarters will serve as proof of the company's solar PV facility business as well as an integrated management, monitoring and evaluation platform upon completion and operation in December 2023," he said as reported by Bernama.
Through the listing move, Pekat offered 138.67 million new shares representing 21.5% of the total share capital at an issue price of 32 sen per unit.
Of the 138.7 million new shares, 32.2 million shares or 5.0% will be made available to the public through voting, 16.1 million shares for its eligible directors, employees as well as individuals who have contributed to the company's success.
The remaining 90.30 million shares or another 14% will be offered to bumiputera investors approved by the Ministry of International Trade and Industry (MITI) in addition to selected investors.
As part of the listing move, existing shareholders will make an offer for the sale of 32.2 million shares to selected investors through a private offering.
The IPO is open for subscription from today, June 2 to June 10.
The company is scheduled to start listing on June 23.
On the remaining proceeds from the listing, Soo Mau said, Pekat will use RM12.7 million for working capital needs, especially for the purchase of its project materials such as solar PV modules, solar PV inverters and ELP products and accessories.
Soo Mau added that RM10 million will be used to repay bank loans while the remaining RM3.7 million is for IPO listing expenses.
He added that the increase in working capital will enable the company to obtain more contracts, carry out more projects and provide more maintenance services.
“Some PV and ELP solar projects that involve us, require tender bonds and performance bonds, which are usually at a fixed amount, varying according to the tender.
"This constrains our share of capital during the project period and affects liquidity throughout the period," he said.
He explained that, therefore, the allocation for working capital is expected to improve liquidity and Concentrated cash flow so that the company is in a stronger position to acquire and complete more projects in the future.
