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Kawan Renergy Inks Underwriting Agreement With M&A Securities

KUALA LUMPUR: Engineering solutions provider Kawan Renergy Bhd (KRB) signed an underwriting agreement with M&A Securities Sdn Bhd for its upcoming initial public offering (IPO) on the ACE market of Bursa Malaysia.

Signing the underwriting agreement. (From left to right): Kawan Renergy Bhd executive director Heng Siew Aun, managing director Ir Lim Thou Lai, M&A Securities Sdn Bhd managing director Datuk Bill Tan and head of corporate finance Gary Ting.

KRB managing director Ir Lim Thou Lai said this IPO exercise would expedite the company’s expansion plans and allow it to tap into the equity capital market, granting better financial flexibility to capitalise on the upcoming opportunities.

“The IPO proceeds will mainly be used as working capital to enable the company to undertake more quality projects, move up the value chain, and strengthen our power generation and energy sale businesses.

“The industrial process equipment industry continues to show promising prospects, supported by the improved demands of various sectors that utilise such equipment,” Lim said in a statement.

KRB, through its subsidiaries, Kawan Engineering Sdn Bhd and Kawan Green Energy Sdn Bhd, designs, fabricates, installs, and commissions industrial process equipment, process plants, and renewable energy and co-generation plants.

Its engineering solutions apply to various industries such as food processing, oleochemical and chemical processing, oil and gas, waste recovery, power plants, and utilities.

Apart from the above, the company is also involved in the power generation and sale business through Bercham Plant, a landfill biogas power plant located in Ipoh, Perak, with an installed capacity of 1.2 megawatts of electricity and a net export capacity of 1.0MW.

KRB’s IPO involves a public issue of 110.0 million new ordinary shares, which comprise 20.0 per cent of its enlarged share capital.

Additionally, there’s an offer for sale of 34.5 million existing shares, accounting for 5.3 per cent of its enlarged share capital.

These shares will be offered to selected investors through a placement exercise, with 1.0 per cent allotted to selected Bumiputera investors, as approved by the Ministry of Investment, Trade and Industry (MITI).

Out of the 110.0 million new shares, 27.5 million will be made available to the Malaysian public via balloting, while 19.3 million shares will be allocated for eligible directors, employees, and persons who contributed to the success of KRB via pink form allocations.

The remaining 63.2 million shares are reserved for selected Bumiputera investors approved by MITI.

M&A Securities will also underwrite 46.8 million shares made available to the Malaysian public and the pink form allocations.

“Increasing foreign direct investment (FDI) in Malaysia is set to boost our industrial process equipment, especially for sectors like oleochemicals, food industries, utilities, oil and gas, and sustainable fuel.

“The weakening of the ringgit also helps make our products more locally and internationally competitive,” Tan said.

“Additionally, the transition towards renewable energy and energy-efficient co-generation opens up great opportunities for KRB.

“As the world shifts to more sustainable energy solutions, our proven capabilities in the integration of design, fabrication, installation, and project management in these areas position us well to meet the paradigm shift in the energy sector,” Lim said.

KRB is scheduled to be listed on the ACE market of Bursa Malaysia by the second quarter of 2024, with M&A Securities as the principal adviser, sponsor, underwriter, and placement agent for its IPO.

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