Solar photovoltaic system specialist, Solarvest Holdings Berhad (“Solarvest” or the “Group”), has successfully launched its prospectus in conjunction with its initial public offering (“IPO”) on the ACE Market of Bursa Malaysia Securities Berhad (“Bursa Securities”).
The launching ceremony was graced by YB Yeo Bee Yin, Minister of Energy, Science, Technology, Environment and Climate Change (“MESTECC”) with Dr. Chen Wei-Nee, Chief Strategy Officer of SEDA Malaysia in attendance.
Solarvest specialises in turnkey engineering, procurement, construction and commissioning (“EPCC”) services for solar photovoltaic (“solar PV”) systems. The Group has completed solar PV systems for Large Scale Solar Photovoltaic (“LSSPV”) plants as well as residential, commercial and industrial properties.
Its services cover the entire process of a solar PV project from the initial site study and assessment, design and procurement of components and modules, to system installation and commissioning. The Group also provides operations and maintenance services of solar PV systems.
Group Chief Executive Officer of Solarvest, Mr. Davis Chong Chun Shiong (张俊雄) said, “The event symbolizes a significant milestone for Solarvest as we en route to list on the local bourse. It is an opportune time for the Group to stay at the forefront to reap the promising growth of the renewable energy industry and emergence of new market opportunities.”
Earlier in his speech, Davis said that the Malaysian solar sector is experiencing an expansionary phase and there are increasing levels of interest in solar. The take-up rates of the Net Energy Metering programme and Large-Scale Solar PV (“LSSPV”) programme have seen encouraging growth amongst commercial and industrial users as well as large investors.
The outlook of the solar industry is further enhanced by the strong support from the local government, whereby various policies and programmes were implemented to accelerate investment shifts towards renewable energy.
According to Independent Market Researcher, Protégé Associates Sdn Bhd, the total solar PV installed capacity in Malaysia is set to grow at a compound annual growth rate of 50% during the period of 2018 to 2023, he added.
“The upward growth trajectory of the renewable energy industry in Malaysia will undoubtedly provide Solarvest new growth opportunities, especially in the LSSPV segments. In addition to that, all solar contractors for engineering, construction and commissioning of Large-Scale Solar 3 (LSS 3) projects are now required to be 100% local. Malaysian solar contractors, including Solarvest, stand poised to benefit from this positive development,” he further added.
The Group is optimistic that the listing exercise will position Solarvest to better harness the rising market opportunities in the solar sector, as well as enabling it to gain access into the capital markets for its future growth.
Solarvest will be raising approximately RM34.6 million from its IPO, of which RM19.2 million or 55.5% will be utilised for the Group’s working capital for daily operations and future projects.
RM3.0 million or 8.7% will be for its geographical expansion in the domestic and international markets. Locally, the Group will spread its footprint in the Southern region of Peninsular Malaysia, pursuing business opportunities in Negeri Sembilan, Melaka and Johor. Beyond Malaysia, Solarvest plans to enter into new markets, namely Vietnam and Taiwan.
Moreover, the Group will channel some of the proceeds to enhance its technical capabilities, which includes acquiring new project machinery and equipment as well as upgrade its information technology (“IT”) software and hardware (RM4.0 million or 11.5%). The remaining of the IPO proceeds will be used for repayment of bank borrowings (RM5.0 million or 14.5%) and listing expenses (RM3.4 million or 9.8%).
The IPO entails a public issue of 98,828,000 new shares in the Group, representing 25.3% of its enlarged share capital at an issue price of RM0.35 per share in the following manner:-
- 19,531,000 new shares available for the Malaysian public;
- 19,531,000 new shares available for application by eligible Directors, employees and persons who have contributed to the success of Solarvest;
- 39,063,000 new shares by way of private placement to Bumiputera investors approved by the Ministry of International Trade and Industry, Malaysia (“MITI”);
- 20,703,000 new shares by way of private placement to selected investors.
Upon listing on the ACE Market, Solarvest will have market capitalisation of RM136.7 million based on the issue price of RM0.35 and its enlarged share capital of 390.6 million shares.
Pursuant to the launch of Solarvest’s prospectus, applications for the Public Issue are open today and will close on Monday, 11 November 2019 at 5.00 p.m. Solarvest is slated to be listed on the ACE Market of Bursa Securities on Tuesday, 26 November 2019.
M&A Securities Sdn Bhd is the adviser, sponsor, underwriter and placement agent for the IPO exercise.
Solarvest is 45.0% owned by Main Market listed, Chin Hin Group Berhad (“Chin Hin”). Upon completion of the IPO, Chin Hin’s shareholding will be approximately 33.6%.