KUALA LUMPUR (Aug 2): West River Bhd, a Malaysian engineering firm, has filed for an initial public offering (IPO) on the ACE Market to raise funds for the construction of a factory that will also serve as its warehouse.

The proposed IPO involves a public issue of 71.54 million new shares and an offer for sale of 35.77 million existing shares at a price to be determined later, according to its draft prospectus filed to Bursa Malaysia. All in all, the listing offers investors up to a 30% stake in the company.

West River’s manufacturing activities are currently based out of its plant, which has a built up area of 2,088 square feet, at Bandar Teknologi Kajang in Selangor, and the company plans to acquire a land to build a new 35,000-square-feet facility, West River said.

That will provide sufficient space to carry out its manufacturing activities and to better organise storage of mechanical and electrical (M&E) engineering project-related inventories, such as cables, wires and spare parts, the company said.

West River mainly provides M&E engineering services and is involved in electrical engineering and air-conditioning and ventilation services as well as provision of so-called green building solutions such as automated control over lighting and other systems.

The company currently has 33 subsisting contracts with a total unbilled order book of RM196.09 million. In the financial year ended Dec 31, 2023, West River made a net profit of RM10.24 million on revenue of RM125.24 million.

Under the IPO’s public issue tranche, the company is allocating 17.89 million shares to the Malaysian public, 8.94 million shares to eligible persons, and 44.71 million shares to approved Bumiputera investors.

Proceeds raised from the IPO will be used to part-finance the acquisition of the land costing RM5.81 million. The company will also set aside some of the funds for repayment of borrowings, general working capital, and to defray listing expenses.

Meanwhile, the offer-for-sale tranche will be privately placed out to select investors and any proceeds will accrue entirely to selling shareholder Neutron Capital Sdn Bhd, which is fully controlled by West River managing director Lim Yong Lai.

M&A Securities is the IPO’s principal adviser, sponsor, underwriter and placement agent.