(From left) Northern Solar Holdings Bhd chairman Amirul Azhar Baharom, executive director Edward Chew, Norwatt Power Sdn Bhd shareholder Tengku Arif Temenggung Tengku Fahad Mua’adzam Shah Al-Marhum Sultan Ahmad Shah, Northern Solar managing director Lew Shoong Kai, M&A Equity Holdings Bhd managing director Datuk Bill Tan and M&A Securities Sdn Bhd corporate finance head Gary Ting.
KUALA LUMPUR: Solar renewable energy specialist Northern Solar Holdings Bhd aims to raise RM42.4mil via its initial public offering (IPO) exercise on the ACE Market of Bursa Malaysia, which is scheduled for Feb 6, 2025.
The IPO consists of the issuance of 67.25 million new ordinary shares at a price of 63 sen apiece. Upon listing, the group is expected to have a market capitalisation of RM249.2mil.
Managing director Lew Shoong Kai said Northern Solar is committed to delivering continuous earnings growth on the back of the groups’ focus on its three main business segments and robust demand within the solar industry.
“We foresee that there will be a lot more engineering, procurement and construction projects for the solar industry down the road, because to achieve the renewable energy capacity of 70% by 2050, there is still a long way to go.
“So, the government’s direction will actually help our company to grow,” he told the media after a prospectus launch ceremony here, yesterday.
When asked whether the group is looking to expand outside of its current business segments, he said Northern Solar will maintain its focus on its current position.
“For the time being, we do not have that kind of direction and our main focus is actually to focus on solar energy, which can bring more profit compared to peers. But down the road, we might bring this to consideration,” he said.
Northern Solar is principally involved in the engineering, procurement, construction and commissioning (EPCC) of solar photovoltaic (PV) systems, generation of renewable energy and operations and maintenance of solar PV equipment.
Nonetheless, Lew shared that the group will be allocating more than half of the expected proceeds for working capital to expand its solar PV systems business.
“We intend to use RM29.17mil towards bolstering our group’s working capital to generate higher revenue for our EPCC of solar PV systems business segment and increase our market share within the solar PV industry in Malaysia,” he said.
Additionally, the group will also be allocating RM3.15mil or 7.4% of the proceeds for business expansion.
Lew said the group aims to expand its business by increasing focus and coverage into new markets, such as Penang, Perak, Kedah, Perlis and Sabah.
“Along with this, we have set up a new corporate office with an engineering command centre to be more efficient in streamlining our operations.
“We also intend to pursue a model of developing, owning and managing a portfolio of solar PV assets that sell the electricity generated to net energy metering and self-consumption consumers to generate a stable inflow of revenue,” he added.
The remainder of the proceeds will be put aside for repayment of bank borrowings as well as estimated listing expenses at RM5.5mil and RM4.55mil, respectively.
As of Nov 19, 2024, Northern Solar had a total unbilled order book of RM83.2mil.
The IPO exercise also involves an offer for sale of 35.6 million existing shares. Post-IPO, Lew and executive director Chew Win Hoe, both of whom are also the co-founders, will equally hold a 30.8%-stake in Northern Solar, down from the current 42.5%.
Real estate developer Lagenda Properties Bhd
, currently holding a 15% stake, will see its share reduced to 12.5% after the IPO.
Applications for the public issue portion of the IPO will close on Jan 20, 2025.
