KUALA LUMPUR: Pekat Group Bhd is raising RM44.4 million from its initial public offering on Bursa Malaysia's ACE Market.
Its listing on June 23 willl allow the solar photovoltaic (PV) and earthing and lightning protection (ELP) specialist to expand its operations to take advantage of the growth in the solar PV industry.
Of the total proceed, 40.6 per cent or RM18 million will be used for the construction of new head office and operational facilities.
With a total built-up area of about 114,252 sq ft, the new head office will integrate the company's facilities (showcase area, central monitoring station, training centre, workshop and warehouse) under one roof.
It will also serve as a showcase for Pekat's solar PV facility business as well as its integrated management, monitoring and assessment platform upon completion and operational by December 2023.
Managing director Chin Soo Mau said the working capital would facilitate the company's capability to secure 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," he said at the company's virtual prospectus launch today.
This has resulted in the lock-up of a portion of its capital during the duration of the project, thereby affecting its liquidity for that duration.
Pekat will also use RM12.7 million (28.6 per cent) for working capital requirements in particular for purchase of materials for its projects such as solar PV modules, solar PV inverters and ELP products and accessories.
Pekat is issuing 138.7 million new shares, representing about 21.5 per cent of the enlarged share capital at 32 sen was each.
The company's existing shareholders will make an offer for sale of 32.2 million shares to selected investors through private placement.
Chief financial officer Oh Keng Jin said the working capital would also allow the company to build new office in Elmina, Shah Alam.
"We also plan to recruit more people going forward," he added.
Pekat has secured about RM155 million order book and the bulk of it (RM117 million) can be recognised by this year.
Chin said Pekat would tap on the RM1 billion solar market locally with potential jobs, especially on the 500MW available quota, beginning this year.
Chairman Kok Kong Chin said it had grown in the past 22 years since its inception, mainly in its core business from being a surge protection devices distributor to solar PV and ELP systems service provider.
Its solar PV services cover the entire scope of work of a solar PV project including operations and maintenance services.