From left: Elridge Energy non-independent non-executive director Dr Wang Hong, independent non-executive directors Rozainah Baharuddin, Tan Suat Hoon and Ahmad Lutfi Abdull Mutalip@Talib, executive director & finance director Salihudin Mohd Razali, executive director & CEO Oliver Yeo and independent non-executive chairman Tan Sri Dr Azmil Khalili Khalid, KAF Investment CEO Rohaizad Ismail, deputy CEO Thariq Usman Ahmad and director of corporate finance Ahmad Fazlee Aziz (Photo by Zahid Izzani/The Edge)

KUALA LUMPUR (Aug 22): Elridge Energy Holdings Bhd (KL:ELRIDGE) ended its first day of listing on Bursa Malaysia’s ACE Market with a gain of nearly 38% on Thursday.

The company, which manufactures biomass fuel products, closed at 40 sen versus its initial public offering price (IPO) of 29 sen per share. The stock opened at 34 sen and climbed to as high as 40.5 sen. The stock was the most active on Thursday, after 319.05 million shares traded.

At the closing price, Elridge has a market capitalisation of RM800 million and valued at about 33 times its trailing earnings based on earnings per share of 1.2 sen for the financial year ended Dec 31, 2023 (FY2023).

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

Biomass fuel products are energy sources derived from organic materials that are burned or combusted to generate heat or electricity.

Speaking during the company's listing ceremony here, Elridge chief executive officer Oliver Yeo Hock Cheong said the group expects to attract “significant interest from both local and international investors”, positioning the group for accelerated growth.

"The group plans to leverage this momentum to expand its operations, enhance its product offerings, and contribute to the global effort to combat climate change through sustainable energy solutions,” he added.

Elridge has raised RM101.5 million from its IPO, which was oversubscribed by 28.78 times.

The company has earmarked more than two-thirds of the proceeds raised from the public issue for capital expenditure to expand its production capacity to cater for orders from other new and existing customers.

Elridge plans to spend 46% of the proceeds for the construction of a new factory and warehouse in Kuantan, which will raise production capacity by 240,000 tonnes. It has also earmarked 21% of the proceeds to buy equipment for 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 utilisation rate of nearly 74% by end-2023, it noted.

The rest of the proceeds from the IPO will be used for 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 Yeo and a group of foreign investors.