KUALA LUMPUR: Solar District Cooling Group Bhd aims to raise RM45.09 million from its initial public offering (IPO) en route to a listing on Bursa Malaysia’s ACE Market on Sept 19.
The IPO represents a significant milestone in the company’s growth trajectory, allowing the group to expand its operations and strengthen its market position in building management system (BMS) and solar thermal systems and energy saving services.
The group are principally involved in the provision and maintenance of BMS, solar thermal systems and energy saving services.
Managing director Edison Kong said the IPO represents a significant milestone in Solar District Cooling’s journey and the group is looking forward to embracing new opportunities and setting new standards in its business.
"Of the proceeds, RM1.9 million will be allocated for the expansion of our headquarters in Kajang, Selangor. Currently, it is a three-story building of about 8,000 square feet and we plan to expand it up to 14,000 square feet.
"We are going to expand our workstations to accommodate our current and future staff and we will also increase the size of our meeting room to accommodate up to 15-20 people. Currently, our meeting room has a capacity of only 12 people,” he said at a press conference after the launch of the company’s prospectus here today.
He said the group would like an additional storage space at its headquarters to temporarily store equipment - this enhancement is aimed at improving employee comfort, which will ultimately lead to better service delivery to clients.
Meanwhile, he said the bigger chunk of the proceeds totalling RM18.7 million will be allocated for the purchase of materials for the BMS segment, and solar thermal systems and energy-saving services segment - the group intends to reinvest the amount into the market.
"Beginning in 2019, we started offering energy services contracts. In the scheme of our energy contract, it means that we need to invest in the equipment... the systems on our clients' facilities.
"We invest at our own cost without a single sen from our clients. The challenge is that we need to save energy in order to recover our investments,” he added.
Kong said that since 2008, the group has been promoting solar thermal systems and energy-saving solutions, where clients have a certain return on investment.
"With the proceeds from this IPO, we hope we can offer bigger projects and extend our services to more clients,” he said.
Meanwhile, Kong said the group is currently working on expanding its footprint in Brunei, where it has already secured some projects.
"We are also exploring opportunities to expand our presence in Singapore.
"We are adopting a more aggressive approach to growth, but it is important to note that even within Malaysia, there are still vast opportunities for us to explore. Therefore, our primary focus remains on Malaysia,” he said.
Among others, the proceeds will be allocated for tender bonds and/or performance bonds for future projects (RM5 million); general working capital (RM12.67 million); capital expenditure, including new equipment for BMS, installation and maintenance of solar thermal hot water systems, and purchasing ICT software and services (RM2.52 million); and listing expenses (RM4.30 million).
The IPO involves the issuance of 118.67 million shares at an IPO price of 38 sen per share. The market capitalisation of the company upon listing will be RM161.05 million.
Applications for the IPO will open at 10 am today, following the prospectus launch, and will close on Sept 6.
Mercury Securities Sdn Bhd is the principal adviser, sponsor, sole underwriter and sole placement agent. - Bernama
