KUALA LUMPUR (June 2): Pekat Group Bhd, a solar photovoltaic (PV), and earthing and lighting protection (ELP) specialist, aims to raise RM44.4 million from its initial public offering (IPO) on Bursa Malaysia’s ACE Market.

In a statement today in conjunction with its prospectus launch, Pekat said it plans to utilise 40.6% (RM18 million) from the proceeds for construction of a new head office and operations as the group expands to capitalise on the growth of the solar PV industry.

It said the new head office is set to be a consolidated facility which includes head office, training centre, monitoring and assessment platform for the company’s solar PV facility business upon completion and operational by December 2023.

The group will allocate RM12.7 million (28.6%) for working capital, namely purchase of materials for projects such as solar PV modules, solar PV inverters and ELP products and accessories; while RM10 million (22.5%) will go towards repayment of borrowings and the remainder RM3.7 million (8.3%) to defray listing expenses.

Pekat managing director Chin Soo Mau said the proceeds will go towards helping the company acquire more contracts, carry out more projects concurrently and provide more maintenance services.

“Some of the solar PV and ELP projects that we are involved in require tender bonds and performance bonds, which is normally a fixed sum that varies from tender to tender.

This results in the lock-up of a portion of our capital during the duration of the project, thereby affecting our liquidity for that duration.

As such, the allocation to working capital is expected to enhance Pekat’s liquidity and cash flows, so that we will be in a stronger position to secure and complete more projects moving forward,” he explains.

Pekat is issuing 138.7 million new shares, representing approximately 21.5% of the enlarged share capital, at an issue price of 32 sen per share.

The group stated 32.2 million new shares (5%) will be made available to the Malaysian public via balloting, 16.1 million new shares (2.5%) for its eligible directors and employees as well as persons who have contributed to the success of Pekat while the remaining 90.3 million new shares (14%) will be placed out to selected Bumiputera investors approved by Ministry of International Trade and Industry Malaysia and selected investors.

Based on the share capital of 645 million shares, Pekat is expected to have a market capitalisation of RM206.4 million.

The IPO is open for subscription from today to June 10, while Pekat’s listing on the ACE Market is tentatively scheduled for June 23, 2021.

M&A Securities Sdn Bhd is Pekat’s principal adviser, sole placement agent, sole underwriter and sponsor in relation to the IPO.