KUALA LUMPUR: Steel Hawk Berhad (“Steel Hawk” or the “Company”), a provider of oil and gas (O&G) services and equipment, has successfully launched its prospectus in preparation for its upcoming transfer from the LEAP Market to the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”).
Steel Hawk, through its subsidiaries (collectively referred to as the “Group”), specializes in providing onshore and offshore support services for the O&G industry. The Group’s core capabilities include engineering, procurement, construction, and commissioning (“EPCC”) services, as well as the maintenance of topside O&G facilities, installation and maintenance of oilfield equipment, and the supply of oilfield equipment. With over a decade of proven experience, Steel Hawk serves clients across the upstream, midstream, and downstream sectors of the O&G value chain.
Deputy Chairman and Executive Director of Steel Hawk, Dato’ Sharman K. Michael, commented, “The launch of our prospectus marks a significant milestone as we prepare to list on the ACE Market. This transition will provide us with access to a broader fundraising platform, supporting our expansion plans and accelerating our long-term growth initiatives.”
Dato’ Sharman emphasized that the outlook for Malaysia’s O&G industry is positive, with Steel Hawk well-positioned to capitalize on upcoming opportunities. He highlighted the potential surge in contracts, which could help the Group expand its market share and enhance its financial performance. Steel Hawk’s ongoing efforts to boost its capabilities aim to solidify its standing as a leading industry player.
Of the RM13.50 million to be raised through the transfer of listing, RM7.00 million (51.85%) will be allocated to expand the Group’s fabrication capacity fivefold, from approximately 13 metric tonnes (“MT”) to 65MT per month, by constructing an additional fabrication yard in Kemaman, Terengganu (the “Teluk Kalung Facility 2”). This new facility will help Steel Hawk overcome space constraints and reduce its reliance on subcontractors, optimizing the turnaround time for its EPCC services and generating cost savings. The facility will also allow the Group to undertake more fabrication activities, including blasting and painting works.
Steel Hawk also plans to expand its EPCC and facilities improvement/maintenance services into the renewable energy (“RE”) sector, particularly in solar and hydroelectric energy. Additionally, the Group intends to offer integrated hook-up and commissioning (“HUC”) services to interconnect O&G infrastructure, encompassing onshore services such as fabrication, assembly, system integration, and pre-commissioning, as well as offshore services like transportation, installation, and start-up commissioning.
Furthermore, RM2.00 million (14.81%) of the proceeds will be used to finance working capital, primarily for the purchase of raw materials like piping, fittings, and structures. An additional RM1.00 million (7.41%) will be allocated for the repayment of bank borrowings, while the remaining RM3.50 million (25.93%) will cover the expenses related to the transfer of listing.
According to an Independent Market Research Report by Protégé Associates, Petroliam Nasional Berhad’s (“PETRONAS”) domestic capital expenditure (“CAPEX”) is projected to increase from RM26.50 billion in 2024 to RM28.00 billion by 2028. Steel Hawk is expected to benefit from this increase as demand for its services grows in line with PETRONAS’ renewed focus on exploration and production activities, signaling potential expansion opportunities for the Group.
The transfer of listing involves a public issuance of 90.00 million new ordinary shares, representing 18.37% of the Group’s enlarged share capital of 490.00 million shares. The exercise also includes an offer for sale of 44.70 million existing shares, or 9.12% of the enlarged share capital, to selected investors via private placement.
Out of the 90.00 million new shares to be issued, 24.50 million shares, representing 5.00% of the enlarged share capital, will be available for application by the Malaysian public. Another 12.25 million shares, representing 2.50% of the enlarged share capital, will be allocated to eligible employees and contributors to the Group’s success (“Pink Form Shares”). The remaining 53.25 million new shares, or 10.87% of the enlarged share capital, will be issued to selected investors through private placement.
Based on an IPO price of RM0.15 per share and the enlarged share capital of 490.00 million shares, Steel Hawk’s market capitalization upon listing will be approximately RM73.50 million.
The Group has shown strong financial performance, with revenue growing from RM24.85 million in the financial year ended December 31, 2021 (“FYE2021”), to RM72.54 million in the financial year ended December 31, 2023 (“FYE2023”), representing a compound annual growth rate (“CAGR”) of 71.00%. Correspondingly, the Group’s net profit increased from RM2.08 million in FYE2021 to RM7.22 million in FYE2023, reflecting a CAGR of 85.16%.
Following the prospectus launch, applications for shares are now open and will close on August 23, 2024, at 5:00 p.m. Barring any unforeseen circumstances, Steel Hawk is scheduled to be listed on the ACE Market of Bursa Securities on September 5, 2024.
UOB Kay Hian Securities (M) Sdn Bhd (“UOB Kay Hian”) is the Principal Adviser, Sponsor, Underwriter, and Placement Agent for the transfer of listing.
