Tentative Date(s):

• Opening of application - 18 December 2024
• Closing of application - 20 January 2025
• Balloting of applications - 22 January 2025
• Allotment of IPO shares to successful applicants - 03 February 2025
• Tentative listing date - 06 February 2025

Company Background

The company was incorporated in Malaysia under the Act on 9 January 2024 as a private limited company under the name of Northern Solar Holdings Sdn Bhd. On 20 March 2024, the company was converted into a public limited company and adopted its present name. The company is principally an investment holding company. Through its subsidiaries, they are principally involved in the EPCC of solar PV systems, generation of renewable energy as well as O&M of solar PV equipment and systems.

The company Group structure as at LPD is as follows:

Use of proceeds

1. Working capital - 68.8% (within 24 months)
2. Repayment of bank borrowings - 13.0% (within 12 months)
3. Business expansion - 7.4% (within 24 months)
4. Estimated listing expenses - 10.8% (within 1 month)

Working capital - 68.8% (within 24 months)

The company intends to utilise RM29.2 million towards bolstering the company Group’s working capital, which would aid in the expansion of the solar PV systems business to generate higher revenue for the company Group’s EPCC of solar PV systems business segment and increase its market share within the solar PV industry in Malaysia.

The proposed breakdown of the RM29.2 million utilised for this purpose, is as follows:

1. RM1.8 million is allocated for the expected 24 months' salaries for the recruitment of an additional 20 engineering and business development employees comprising project engineers, O&M engineers and technicians as well as business development executives, in line with the company's geographical expansion plans; and
2. the remaining RM27.4 million is allocated for the purchase of project materials, which are mainly solar PV panels and inverters, being the key components required for the projects. This will allow the company to be better positioned to undertake more projects in terms of scale and volume as the business continues to grow.

Repayment of bank borrowings - 13.0% (within 12 months)

The company intends to utilise RM5.5 million to repay the company Group’s outstanding borrowings, which include hire purchases and term loans which were used by the Group to fund, amongst others, the costs of ongoing projects and the working capital. The details of the bank borrowings are as follows:

The repayments will renew the company Group’s borrowing capabilities which will allow for better financing strength in submitting tender proposals for projects. If the balance of the borrowings as at the time of repayment is less than the amount allocated, the excess amount allocated will be utilised for the working capital requirements.

Business expansion - 7.4% (within 24 months)

Approximately RM3.2 million will be used for the company's business expansion, to strengthen its market presence regionally in Peninsular Malaysia, as follows:

• Establishment of the corporate office and command centre

RM2.0 million from the proceeds of its Public Issue is allocated for the renovation and interior fit-out works of the new corporate office, engineering command centre and laboratory. This allocation will replenish the internally generated funds which was used to pay the following, pending the receipt of proceeds from the Public Issue:

Approximately RM0.6 million is being used to equip the engineering knowledge centre and support the further development of EPCC and O&M businesses. As at LPD, approximately RM0.1 million of the RM0.6 million has been utilised, funded from the company’s internally generated funds. These funds will be replenished pending the receipt of proceeds from the Public Issue.

The breakdown of allocation of funds for the abovementioned RM0.6 million is as follows:

• Geographical expansion

RM0.60 million of the proceeds from Public Issue will be used to fund the establishment of an expanded office in Johor and an additional office in Pulau Pinang within the next 24 months upon Listing, details of which are as follows:

Business Model

The company’s business model is depicted in the following diagram:

Click here to continue the IPO - Northern Solar Holdings Berhad (Part 2)

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