(From left): Elridge Energy Holdings Bhd independent non-executive director Ahmad Lutfi Abdull Mutalip, KAF Investment Bank Bhd co-head of corporate finance Ahmad Fazlee Aziz, Elridge Energy executive director Salihudin Mohd Razali, Elridge CEO Oliver Yeo, KAF Investment Bank CEO Rohaizad Ismail, KAF Investment Bank deputy CEO Thariq Usman Ahmad, Elridge Energy independent non-executive director Tan Suat Hoon, and Elridge Energy independent non-executive director Rozainah Baharuddin, at the launch of the Elridge Energy’s IPO prospectus on Tuesday. (Photo by Zahid Izzani/The Edge)

KUALA LUMPUR (Aug 6): Elridge Energy Holdings Bhd (KL:EEHB), which manufactures biomass fuel products, unveiled its prospectus on Tuesday for its initial public offering (IPO) on the ACE Market that would raise up to RM203 million.

The IPO, priced at 29 sen per share, involves a public issue of 350 million new shares and an offer-for-sale of 350 million existing shares, according to its prospectus. All in all, the IPO involves a sale of up to 35% stake in the company that would be valued at RM580 million upon listing.

Applications will close on Aug 12 and listing has been scheduled for Aug 22.

Elridge, partly backed by listed electrical distribution equipment firm Mikro MSC Bhd (KL:MIKROMB), mainly manufactures and trades biomass fuel products, particularly palm kernel shell and wood pellets, used to generate heat or electricity.

Biomass products are typically a by-product or waste from renewable sources, such as plants or organic waste.

More than two-third of the proceeds raised from the public issue have been set aside for capital expenditure to expand its production capacity, to cater for orders from other new and existing customers.

The public issue, which will gross about RM101.5 million, comprises 80 million shares for the public, 20 million shares for eligible persons, and 250 million shares through private placement to select investors.

The company plans to spend 46% of the proceeds for the construction of a new factory and warehouse in Kuantan, that will raise production capacity by 240,000 tonnes. The company has also earmarked 21% of the proceeds to buy equipment for the new factories in Kuantan, as well as in Johor and Sabah.

The company currently operates out of a Port Klang factory, which has a capacity of 720,000 tonnes per year, but has hit a utilisation rate of nearly 74% by end-2023, it noted.

The rest of the proceeds from the IPO will be used as working capital and to defray listing expenses.

Proceeds from the sale of existing shares, totalling RM101.50 million, would go entirely to the selling shareholders, including chief executive Yeo Hock Cheong and a group of foreign investors.

KAF Investment Bank Bhd is the principal adviser, sponsor, underwriter and placement agent for the IPO.