KUALA LUMPUR (April 4): Engineering services firm 3REN Bhd has filed for an initial public offering (IPO) on Bursa Malaysia’s ACE Market to raise more funds for expansion, including setting up new delivery centres and an office in Singapore.

The proposed IPO involves a public issue of 110 million new ordinary shares, as well as an offer for sale of 45 million existing shares, according to its draft prospectus on Bursa Malaysia. All in all, the listing would offer investors up to a 23.84% stake in the company.

“We intend to set up our own dedicated delivery centres to specifically undertake certain product engineering services projects which are usually performed at various locations of our customers,” 3REN said.

Having its own delivery centre would boost efficiency and optimise cost while allowing scalability among other benefits, the company noted. 3Ren has identified a premise to rent for its first delivery centre in Penang, and plans to hire at least 40 new engineers and technicians, it said.

3REN is mainly involved in providing engineering support services, product engineering services, digitalised solutions and automated equipment. It serves various segments in the semiconductor and electronics industry value chain, such as integrated circuit assembly and testing.

The company’s fully-owned subsidiaries — Sophic Automation Sdn Bhd, Sophic MSC Sdn Bhd and Pinkypye Sdn Bhd — are involved in automation solutions, precision machining and engineering services.

For the nine-month period ended Sept 30, 2023, the company posted a net profit of RM6.58 million, up 14.6% from RM5.74 million in the corresponding period of the previous year. Revenue was down 8.4% year-on-year to RM67.18 million from RM73.37 million.

For the public issue, 3REN is offering 32.5 million shares to the Malaysian public, 30 million shares to eligible persons, 3.8 million to Bumiputera investors, and 43.7 million to select investors through private placement.

The offer for sale tranche will be done through private placement to select Bumiputera investors

Proceeds from the IPO will be allocated towards establishing an office in Singapore and funding research and development initiatives. The company will spend some of the funds raised for repayment of bank borrowings, as working capital and on listing expenses.

Meanwhile, the proceeds from the offer for sale will accrue entirely to the offerors, including chief executive officer Koh Dim Kuan, executive director Lee Chee Hoo, business development manager Low Chee Onn and shareholder Malaysian Technology Development Corporation.

KAF Investment Bank is the principal adviser, sponsor, sole underwriter and sole placement agent.