The company will also offer 58.06 million of its existing shares for sale. The listing is tentatively scheduled on January 22.
Upon listing, Powerwell expects to boast a market capitalisation of RM145.46 million based on its enlarged issued share capital of 580.55 million shares.
Managing director Jason Tham said the IPO would help the company embark on its business strategies to increase competitiveness in the industry, market presence and marker share.
“We intend to develop and commercialise our Powerwell-branded products and obtain third party international electrotechnical commission (IEC) standards-compliant certifications for a wider range of our products.
“We also intend to grow our replacement market business as we see growth opportunities in this area with existing buildings that are due for refurbishments or upgrades to prolong the life of the property,” Tham said at the company’s prospectus launch here today.
Tham said Powerwell had appointed distributors regionally to increase its marketing efforts locally and overseas.
Of the total IPO proceeds, he said RM10.27 million would be used for capital expenditure to buy machinery and equipment to enhance Powerwell’s enterprise resource planning system and hardware.
Another RM3.87 million is allocated for certification expenditure for a wider range of Powerwell-branded products, RM3.62 million for working capital purposes and the remaining RM4.1 million for the listing expenses.
He said the company’s unbilled orderbook stood at RM52.21 million as at December 3, 2019, which will provide earnings visibility for the next 24 months.
“We are also actively bidding for numerous projects in the construction sector mainly in commercial, infrastructure and industrial projects domestically and overseas such as in Indonesia, Philippines, Vietnam and Bangladesh,” he said.
Powerwell and its subsidiaries are primarily involved in the design, manufacturing and trading of electricity distribution products comprising low voltage switchboards, medium voltage switchgear and related products.
Executive director Ricky Lee said the IPO allows the company to gain excess in the capital market for future expansion, while enhancing its corporate profile and expanding customers base and skilled employees.
“To be a listed company, it will require us to be more transparent to help expanding our business dealings in overseas and gaining brand recognition in the international market,” he said.
The company is confident of recording a sustainable growth this year due to the expected improvement in the construction sector, especially infrastructure projects domestically and overseas.
“For instance, the revival of Bandar Malaysia, the High Speed Rail projects, Light Rail Transit 3 as well as the relocation of Indonesia’s capital city,” Lee said.
He said there was a potential for the company to supply its electricity distribution products as long as the construction industry remains robust for both commercial/ industrial and residential developments.