KUALA LUMPUR (Aug 8): Engineering services firm 3REN Bhd said on Thursday it has received Bursa Malaysia's approval to list on the ACE Market.

The approval marks another step forward for the company’s IPO since it filed its draft prospectus in April. 3REN did not provide a timeline for the IPO, though the company will have six months to complete the IPO from the approval date.

“The IPO approval signifies an important milestone for 3REN, as we progress towards becoming a public listed company, allowing the group to access the equity capital market as we embarked on the next growth phase,” 3REN chief executive officer Koh Dim Kuan said in a statement.

3REN is seeking to raise more funds for expansion, including setting up new delivery centres and an office in Singapore.

Having its own delivery centre would boost efficiency and optimise cost, while allowing scalability among other benefits, the company noted. 3Ren has identified premises 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.

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 at a price to be determined later, 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.

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 a private placement.

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

Proceeds from the IPO will be go 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.