KUALA LUMPUR (March 5): Express Powerr Solutions (M) Bhd, a generator rental services provider, on Wednesday filed for an initial public offering (IPO) on the ACE Market to raise funds to buy more generators as the company intends to expand its business across Malaysia.

The proposed IPO involves a public issue of 180 million new shares and an offer for sale of 65.41 million existing shares at a price to be determined later, according to the draft prospectus filed with Bursa Malaysia. All in all, the listing will offer investors up to a 19.26% stake in the company.

Worth noting is that Express Powerr had in October last year filed its IPO prospectus exposure which involved up to 211.9 million shares, comprising an offer for sale of up to 51.15 million existing shares, as well as a public issue of up to 160.75 million new shares.

Established in August 2005, the Klang-based company mainly provides generator rental services, including installation and disassembly, technical support and on-site operation personnel as well as maintenance services.

Its customers primarily consist of Tenaga Nasional Bhd (KL:TENAGA), mechanical and electrical (M&E) companies, manufacturing companies, construction companies, event organisers and government agencies.

For its financial year ended Dec 31, 2023, the company made a net profit of RM9.89 million on the back of RM39.42 million in revenue. Gross profit margin was 56.5% while profit before tax margin stood at 32.9%.

Under the proposed public issue, the company will set aside 46.72 million shares for the public and 18.69 million shares for eligible persons. Meanwhile, 63.19 million shares will be allocated to selected investors and another 51.39 million new shares to Bumiputera investors, both via private placement.

Proceeds from the public issue have been earmarked for the purchase of generators and medium and high voltage equipment, repayment of bank borrowings, working capital, coupled with listing expenses.

“Our group recognises that expanding our fleet of generators is essential to support our business strategies including expanding to other regions in Malaysia to gain new customers, meet the growing demand for our services, enhance our operational capacity and ensure we can effectively cater for the needs of our existing and potential customers,” it said.

Additionally, Express Powerr is planning to venture into the solar photovoltaic (PV) solutions business to capitalise on the strong demand for this segment in Malaysia.

Meanwhile, proceeds from the offer for sale will accrue entirely to its shareholder and managing director Lim Cheng Ten. Post-IPO, Lim’s stake will be diluted to 73.74% from the current 100% stake in the company.

Mercury Securities Sdn Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.