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Kawan Renergy Berhad Set to Raise RM33.0 Million in IPO En Route to ACE Market Listing

KUALA LUMPUR: Engineering solutions provider Kawan Renergy Berhad has announced the successful launch of its prospectus, marking a significant step towards its upcoming initial public offering (IPO) and listing on the ACE Market of Bursa Malaysia Securities Berhad.

L-R: Ms. Heng Siew Aun, Executive Director of Kawan Renergy Berhad; Ir. Lim Thou Lai, Managing Director of Kawan Renergy Berhad; Dr. Chuah Chaw Teo, Chairman of Kawan Renergy Berhad; Datuk Bill Tan, Managing Director of M & A Securities Sdn Bhd; Mr. Gary Ting, Head of Corporate Finance of M & A Securities Sdn Bhd

Kawan Renergy Group, comprising subsidiaries Kawan Engineering Sdn Bhd and Kawan Green Energy Sdn Bhd, specializes in designing, fabricating, installing, and commissioning industrial process equipment, process plants, and renewable energy and co-generation plants. Their solutions cater to diverse industries such as food processing, oleochemical and chemical processing, oil and gas, waste recovery, power plant, and utilities. Additionally, the Group is engaged in power generation and the sale of electricity.


Managing Director Ir. Lim Thou Lai noted that the prospectus launch is a significant milestone for Kawan Renergy as it progresses towards becoming a publicly listed entity. The IPO is integral to their long-term growth strategy, facilitating additional funding to support ongoing and future projects, and expand their power generation and electricity sales segment.


Based on an Independent Market Research Report by Smith Zander International Sdn Bhd, Malaysia’s industrial process equipment industry saw substantial growth from RM15.6 billion in 2020 to RM23.5 billion in 2023, with a compound annual growth rate (CAGR) of 14.6%. With increasing foreign direct investment (FDI) inflows, industries like power generation, oil and gas, and manufacturing are expected to expand, benefiting the industrial process equipment sector. The Group is optimistic about the industry’s prospects.


Ir. Lim outlined the Group’s plans for the IPO proceeds, which include allocating a significant portion towards supplementing working capital for ongoing and future co-generation plant projects. Additionally, investments are earmarked for constructing a new biomass power plant and enhancing the production output of the Bercham Plant, a landfill biogas power plant. A portion of the proceeds will also go towards repaying bank borrowings and defraying listing expenses.


Mr. Gary Ting, Head of Corporate Finance at M & A Securities Sdn Bhd, expressed confidence in Kawan Renergy’s capability to expand its market share with the successful listing. He highlighted the potential benefits of the listing, including enhancing the Group’s reputation, expanding visibility, and attracting talent.


The IPO exercise comprises a public issuance of new ordinary shares, representing 20.0% of its enlarged share capital, as well as an offer for sale of existing shares. A portion of the new shares will be available to the Malaysian public via balloting, with allocations for eligible Directors, employees, and contributors to the group’s success. Selected Bumiputera investors approved by the Ministry of Investment, Trade and Industry will also have access to a portion of the shares.


Upon listing, Kawan Renergy’s market capitalization is estimated to be approximately RM165.0 million, based on the IPO price of RM0.30 per share and its enlarged issued shares. The Group has demonstrated robust financial performance, with revenue and net profit experiencing significant growth over the past three years.


Applications for the public issue are currently open and will close on 14 May 2024, with the Group scheduled to be listed on the ACE Market of Bursa Securities on 29 May 2024. M & A Securities Sdn Bhd is serving as the Principal Adviser, Sponsor, Underwriter, and Placement Agent for the IPO exercise.

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