KUALA LUMPUR, 29 May – Northern Solar Holdings Bhd, a renewable energy solutions provider, is set to debut on the ACE Market of Bursa Malaysia on February 6, aiming to raise up to RM64.8 million to support its business expansion and operational needs.
The upcoming initial public offering (IPO) comprises 67.25 million new shares and an offer for sale of 35.6 million existing shares, priced at 63 sen per share. Upon completion, the listing will offer the public up to a 26% equity stake in the company.
According to Northern Solar, the RM42.37 million in gross proceeds from the public issuance will primarily be channelled towards expansion initiatives and working capital. The offer for sale, valued at RM22.43 million, will benefit the existing shareholders, notably co-founders Lew Shoong Kai and Chew Win Hoe, who each currently hold 42.5% of the company.
The deadline for IPO applications is January 20.
Northern Solar specialises in engineering, procurement, construction, and commissioning (EPCC) of solar photovoltaic (PV) systems. Its services also cover renewable energy generation as well as operations and maintenance of solar PV infrastructure. Currently, the group operates 10 PV systems, with another four managed under its 20%-owned associate, Engtex Energy Sdn Bhd, where Engtex Group Bhd (KL:ENGTEX) holds the remaining 80% stake.
Property developer Lagenda Properties Bhd (KL:LAGENDA) maintains a 15% interest in Northern Solar.
Based on the IPO pricing, Northern Solar’s enlarged share capital of 395.6 million shares will give it a market capitalisation of RM249.23 million, translating to a price-to-earnings (P/E) ratio of 24 times its financial year ended March 31, 2024 (FY2024) earnings.
For FY2024, the company posted a net profit of RM10.09 million on a revenue of RM77.97 million.
Of the public issue, 19.78 million shares are allocated for the Malaysian public, 7.91 million shares to eligible individuals, and 39.56 million shares for private placement to selected investors.
The 35.6 million shares offered for sale will also be placed with selected investors. Proceeds from this portion will go entirely to the selling shareholders, Lew and Chew, whose post-listing stakes will be reduced to 30.8% each.
From the IPO proceeds, RM29.17 million has been designated for working capital to scale up its solar PV operations. Meanwhile, RM3.2 million is set aside for the development of a new corporate office and engineering command centre in Petaling Jaya, along with the establishment of new offices in Johor and Penang.
Additionally, RM5.5 million will be used to repay bank borrowings, and the remaining RM4.55 million will cover listing expenses.
M&A Securities is serving as the adviser, sponsor, underwriter, and placement agent for the IPO.
