Northern Solar, backed by Lagenda Properties, files for ACE Market IPO

• The proposed IPO involves a public issue of 67.25 million new shares and an offer-for-sale of 35.6 million existing shares at a price to be determined later, according to its draft prospectus posted to Bursa Malaysia. All in all, the listing would offer investors up to a 26% stake in the company.

KUALA LUMPUR (June 26): Northern Solar Holdings Bhd, which installs solar panels and operates solar farms, has filed for an initial public offering (IPO) on the ACE Market to raise funds for expansion.

The proposed IPO involves a public issue of 67.25 million new shares and an offer-for-sale of 35.6 million existing shares at a price to be determined later, according to its draft prospectus posted to Bursa Malaysia. All in all, the listing would offer investors up to a 26% stake in the company.

“If we are to expand our business and secure more and larger contracts, we must increase our available financial resources to satisfy the working capital required to undertake the contracts,” Northern Solar said. On top of purchasing equipment, the company said it also plans to hire 20 engineers and staff.

Northern Solar mainly provides engineering, procurement, construction and commissioning of photovoltaics systems. The company also owns and operates 10 solar PV systems and another four solar PV systems under its 20%-owned Engtex Energy Sdn Bhd. Pipe and valve maker Engtex Group Bhd (KL:ENGTEX) owns 80% of Engtex Energy.

Real estate developer Lagenda Properties Bhd (KL:LAGENDA) has a 15% stake in Northern Solar. Co-founders Lew Shoong Kai and Chew Win Hoe currently hold a 42.5% stake in Northern Solar each.

Under the IPO’s public issue, Northern Solar will make 19.78 million shares available to the public and 7.91 million shares to eligible persons. The company will also set aside 39.56 million shares to select investors through private placement.

Northern Solar has also earmarked a portion of the IPO proceeds to repay its bank borrowings, set up a corporate office and command centre, as well as expand existing offices and establish new ones.

For the latest financial year ended March 31, 2024, Northern Solar recorded net profit of RM10.09 million on the back of RM77.97 million revenue.

The offer-for-sale, meanwhile, will be done through private placement to select investors. Proceeds from the sale of existing shares will accrue entirely to the selling shareholders Lew and Chew, who will reduce their holdings to 30.8% each.

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

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