KUALA LUMPUR (March 19): Steel Hawk Bhd has filed for an initial public offering (IPO) that would raise more funds for the oil-and-gas services firm as part of its listing transfer from the LEAP Market to ACE Market.

The IPO involves a public issue of 90 million new shares and an offer for sale of 44.7 million existing shares, according to the draft prospectus filed with Bursa Malaysia. All in all, the listing would offer investors a 27% stake in the company listed on the LEAP Market since October 2021.

“Our shares are generally illiquid and have a lower trading volume” on the LEAP Market, and shareholders have committed not to sell or reduce their stakes in the company until the listing is completed, Steel Hawk said.

Steel Hawk mainly services the oil-and-gas industry both onshore and offshore, providing engineering, procurement, construction, and commissioning for chemical injection skids and facilities improvement as well as maintenance of topside facilities.

The company also sells, instals and maintains oilfield equipment. For the financial year ended Dec 31, 2023, profit after tax rose 24% to RM7.22 million, on the back of revenue of RM72.54 million, while margins expanded. The also said it had exhausted the RM3.2 million raised from its LEAP Market listing.

Out of the 90 million new shares, Steel Hawk is offering 24.5 million shares to the Malaysian public, 12.25 million to eligible persons, and 53.25 million shares to select investors through private placement. The offer for sale, meanwhile, will be done through private placement to select investors.

Proceeds from the public issue will go towards construction of the company's second facility in Teluk Kalung that will cost an estimated RM13.64 million, as well as funding working capital, repayment of bank borrowings, and to defray listing transfer expenses.

Meanwhile, any money raised from the offer for sale will accrue entirely to selling shareholders, including chief executive officer Salimi Khairuddin and chief operating officer Khairul Nazri Kamarudin.

UOB Kay Hian is the principal adviser, sponsor, underwriter and placement agent for the IPO.