KUALA LUMPUR (June 20): Energy and engineering services firm Kinergy Advancement Bhd (KL:KAB) said it is looking to raise up to RM66.23 million via a private placement to finance its renewable energy projects and repay its loans.
In a bourse filing on Thursday, Kinergy (previously known as Kejuruteraan Asastera Bhd) said it plans to issue up to 198.63 million shares to independent third parties at an issue price to be determined later. Based on an illustrative issue price of 33.34 sen, the group will be raising RM66.23 million.
Of the proceeds, RM35.93 million will be utilised for its renewable energy projects, and RM30 million will be for paring down bank borrowings. The remaining RM300,000 will be used to defray the placement’s expenses.
Previously, the group had raised RM60.95 million from an earlier private placement, of which RM29.94 million went towards its sustainable energy solutions (SES) business, RM14.1 million for repayment of bank borrowings, RM16.38 million to fund working capital requirements and RM525,000 for the exercise's expenses.
The placement shares were issued in two tranches, with the second tranche of 41.32 million shares issued in January this year, raising RM15.70 million. The first tranche of 137.12 million shares, raising RM45.25 million, was issued in October last year.
As of Wednesday, Kinergy said it had secured four renewable energy projects, of which two are in Malaysia and one each in Indonesia and the Philippines, with a total estimated concession value of RM837.55 million over a concession period of between 21 and 25 years.
In addition, the group is also in the midst of tendering for a renewable energy project in Malaysia, with an estimated concession value of RM1.59 billion over a 20-year concession period.
Meanwhile, Kinergy said its total bank borrowings stood at RM140.58 million as at Wednesday. Of this, RM79.17 million are long-term borrowings and RM61.41 million are short-term borrowings.
The repayment of bank borrowings amounting to RM30 million is expected to result in annual interest savings of RM2.05 million, it added.
Kinergy's net profit more than doubled to RM4.97 million for the three months ended March 31, 2024, from RM2.43 million a year earlier, lifted by higher contributions from its SES business. Revenue, however, declined 1.7% year-on-year to RM42.04 million from RM42.76 million due to the completion of some engineering projects.
The company’s order book balance totalled RM942 million at end-March, up from RM939 million at the end of December 2023.
Shares of Kinergy closed down one sen or 2.7% at 36.5 sen, valuing the group at RM725 million.