Kawan Renergy to grow power business with IPO

Source: The Star

PETALING JAYA: Kawan Renergy Bhd, which is en route for a listing on the ACE Market, aims to raise RM33mil from its initial public offering (IPO).

The engineering solutions provider said it intends to use the proceeds to capitalise on the future demand for industrial-process equipment.

"We plan to allocate the majority of the IPO proceeds, some RM15mil or 45.5%, to supplement the working-capital requirements of our ongoing and future co-generation plant projects in tandem with the expected growth in scale of our business," Kawan Renergy's managing director Lim Thou Lai said during the launch of the company's prospectus yesterday.

RM5mil (15.1%) will be used to enhance the scale of its electricity business, while RM2.5mil (7.6%) will be allocated to improve the production output at its Bercham plant in Ipoh, Perak.

The group is expected to produce about 24 megawatts of electricity per day, which will increase Kawan Renergy's revenue to RM3.4mil yearly.

The group recently expanded into power generation and sale of electricity.

The balance of RM10mil or 30.3% of the proceeds will be allocated towards the repayment of bank borrowings and defraying of listing expenses, Lim said.

Touching on the hike in steel prices amid rising commodity prices, Lim said this will not significantly impact the company as it is likely that some of the cost will be passed on to customers.

Applications for Kawan Renergy's IPO are now open and will close on May 14, 2024 at 5pm.