KUALA LUMPUR (Aug 13): Bird's nest supplier Enest Group Bhd (KL:ENEST), which listed on the Leading Entrepreneur Accelerator Platform (LEAP) in August 2019, is now eyeing a transfer to the ACE Market on Bursa Malaysia.

In a filing with Bursa Malaysia on Monday, the group said the rationale for the proposed transfer is to provide the company access to a bigger platform to support its expansion plan.

Enest is principally involved in the processing of raw bird's nests into edible bird's nests in Malaysia and currently exports to China, Australia, Singapore and Taiwan.

As part of the proposed transfer, Enest Group will undertake an initial public offering (IPO) that entails the public offering of 131.3 million Enest shares, representing up to 22.59% of the enlarged issued shares of the company of 581.25 million shares.

A total of 116.25 million new shares will be issued representing 20% of enlarged issued shares, and offer for sale of 15.05 million existing shares from major shareholders Tan Heng Guan and Tan Teh Sheng, which represents 2.59% of enlarged issued shares

The group said that the final IPO price will be determined at a later date and for the purpose of the announcement, it has assumed an illustrative IPO price of 19 sen.

Based on the illustrative IPO price of 19 sen per share and the total enlarged number of 581.25 million Enest shares in issue, the price-earnings multiple is about 15.8 times, based on trailing profit after tax of RM10.23 million for the rolling 12-month period ended Dec 31, 2023.

The total indicative gross proceeds raised is estimated to be RM22.09 million.

The group intends to use the proceeds to purchase factories, working capital, purchase and installation of bottled bird’s nest production lines as well as repayment of bank borrowings.

The proposals are expected to be completed in the second quarter of 2025.

M&A Securities has been appointed as the group adviser for the proposals and the sponsor for the proposed transfer.  

Enest's share price closed unchanged on Monday at 14 sen, giving the group a market capitalisation of RM65.1 million.