KUCHING: Reservoir Link Energy Bhd’s (RLEB) 51 per cent-owned subsidiary Founder Group Limited (FGL) is expected to raise up to US$21.16 million from its proposed initial offer (IP) on NASDAQ Stock Exchange. This is based on an assumed IPO price of US$4 per share.
“The proposed IPO is expected to raise gross proceeds of US$4.60 million based on the minimum scenario or up to US$21.16 million under the maximum scenario, after deducting the estimated underwriting discounts and the estimated offering expenses payable by FGL,” RLEB said in a filing with Bursa Malaysia. In conjunction with the proposed IPO, FGL will enter into a conditional subscription agreement with V Invesco Fund (L) Limited (VIFL), being an affiliate of V Capital Consulting Limited (VCCL), the advisor for the IPO of FGL, for the subscription of a new warrant in FGL (VIFL warrant) without payment of consideration.
The VIFL warrant is exercisable into a maximum of 1,350,000 new FGL shares for a tenure of five years at an exercise price of US$2 per share.
According to RLEB, the proposed listing of FGL entails the IPO of at least 1,250,000 new shares (issue shares) representing approximately 6.75 per cent enlarged issued share capital of GFL after the IPO (minimum scenario) or up to 5,750,000 issue shares representing not more than 24.20 per cent of the enlarged issued share capital of FGL after the IPO (maximum scenario) at an indicative issue price of at least US$4 per share (IPO) price to new investors.
“Upon the completion of the proposed listing, FGL will remain as the subsidiary of RLEB, with equity interest of 41.33 per cent under the minimum scenario or 32.20 per cent under the maximum scenario,” said the company. FGL is an investment holding company while its key subsidiary FESB is involved in the solar industry in Malaysia.
FESB is a pure play, end-to-end engineering, procurement, construction and commissioning (EPCC) solutions provider for solar photovolatic (PV) facilities in Malaysia. Its primary focus is on two key segments: large-scale solar projects and commercial and industrial solar projects.
RLEB said if US$4.6 million is raised (minimum scenario), US$1.38 million (30 per cent) each will be utilised to fund geographical expansion, expansion of renewable energy (RE) potentials and general working capital.
The remaining US$460,000 (10 per cent) is to be used for mergers and acquisition. If US$21.16 million (maximum scenario) is raised, US$6.348 million (30 per cent) each will be utilised for geographical expansion, expansion of RE potential and general working capital while RM9.851 million (10 per cent) to be set aside for mergers and acquisition.
On geographical expansion, FGL group aims to reach to Southern Asia, such as Singapore, Philippines, Thailand and Indonesia to undertake future solar PV projects. For expansion of RE potential, RLEB said FGL group will fund any suitable and viable investment(s), which may include but is not limited to, the provision and implementation of hydro/biogas projects. At this junction, FGL group is still exploring viable RE investment options and opportunities.
The FGL group is currently also in the midst of identifying businesses and/or assets to be acquired or invested.
RLEB said the proposed listing of FGL will enable the group to unlock the value of its investment in FESB and provide a transparent valuation benchmark for its investment. “In addition, it will promote a clearer segregation of business responsibilities and operations for the group’s solar PV business, allowing the company’s management to efficiently allocate its resources to accelerate the expansion and growth of the business,” it added.
Separately, RLEB said the listing status of FGL will also enable FGL to leverage on the Nasdaq brand to enhance its reputation and gain recognition for its solar PV business, thereby improving its visibility which allow it to achieve greater market penetration and gain broader client base. It will also enable FGL the financial flexibility to raise future funding requirement through the equity capital market independently from RLEB, to reinforce its equity position and raise substantial cash to fund its future investment opportunities and growth.’ Subject to all relevant approvals received, RLEB said the proposed listing of FGL on Nasdaq is expected to be completed by second quarter of 2024.
