KUALA LUMPUR (July 10): Wasco Greenergy Bhd has filed for a primary share sale on the Main Market of Bursa Malaysia, as part of the renewable energy contractor’s spin-off listing from Wasco Bhd (KL:WASCO).
The proposed initial public offering (IPO) involves issuance of shares under the retail tranche and sale of existing shares to institutional investors, at a price to be determined later, according to the draft prospectus. All in all, the share sale will offer up to 37% stake in Greenergy.
Wasco, the parent company mostly known for providing pipe coating to the oil-and-gas industry, considers Greenergy’s business as “a distinct and viable business of its own, which merits a separate listing on the Main Market,” the prospectus showed.
Greenergy mainly builds biomass energy systems that burn agricultural wastes with a boiler, and power plants that typically use natural gas to heat water into steam to power turbines and generate electricity.
In 2024, Greenergy made a net profit of RM39.04 million, on revenue of RM276.72 million. However, the company is now seeking to transition into owning and operating biomass steam power plants for their recurring revenue.
A non-binding offer has been submitted in April, to acquire a share in a joint venture that owns and operates a biomass plant in Malaysia.
“We are currently undertaking due diligence and expect to submit a binding offer tentatively by August, subject to negotiations with the counterparty,” it said.
Preliminary study by Greenergy estimated capital expenditure, including land costs, for a plant with capacity of 30 tonnes per hour, at up to RM45 million; while a 70-tonnes-per-hour plant would cost as much as RM75 million.
Further, the company plans to set up new offices to expand its operations in Indonesia. “This will allow our group to capitalise on potential business opportunities” in the engineering, procurement, construction, and commissioning of steam energy systems and auxiliary facilities, Greenergy said.
Part of the proceeds will also be used as capital expenditure for new equipment and machinery, and the upgrade of its headquarters, as well as for digitalisation of business systems and processes. A small portion will also be set aside for spending on research and development.
CIMB Investment Bank is the principal adviser, bookrunner, managing underwriter, and underwriter for the IPO. The company may add more bookrunners and underwriters later.