PESTECH (Cambodia) Plc, a subsidiary of Malaysia-based PESTECH International Bhd, yesterday officially launched a public roadshow for its initial public offering (IPO) and the opening of a public subscription.
The company has been granted an approval to proceed with its flotation on the Cambodia Securities Exchange (CSX). The closing of public subscriptions is on Aug 4, while the allotment of IPO shares to successful applicants will be on Aug 7 and the official listing on the CSX is expected to be on Aug 12.
The IPO entails the listing of 3,945,000 ordinary shares at an offer price of $0.76 (3,120 riels) per share. The total gross proceeds from the IPO amount to approximately $3 million (12.308 million riels).
The company offers the design, engineering, manufacturing, installation, testing and commissioning of high voltage (“HV”) and extra-high voltage (“EHV”) substations, transmission lines, underground cables and equipment for the build-up of a fully integrated electricity transmission infrastructure commissioning of power transmission lines and underground cables.
PESTECH (Cambodia) Chief Executive Officer and Executive Director Paul Lim Pay Chuan, said at the company’s IPO public roadshow that listing PESTECH Cambodia on Cambodia’s local bourse will provide an opportunity for the Cambodian public to invest in a power industry in tandem with the growth of demand in electricity in the Mekong region.
He said that it also creates a platform to attract strategic long-term investor partners to increase their product portfolios and services that PESTECH Cambodia can offer. On top of this, the company is confident with the stability and business-friendly environment in Cambodia.
“The group would like to further develop PESTECH Cambodia in terms of investment and asset build-up in Cambodia to serve its Indo-China market,” Lim said, adding the company has focused on the markets in Cambodia, Lao PDR and Myanmar.
Chief Executive Officer of Cambodia Securities Exchanges Hong Sok Hour congratulated the subsidiary of PESTECH International Berhad, a Malaysian integrated electrical power technology company listed on the Main Market of Bursa Malaysia, for the achievement for the ongoing all the way since the very beginning of the process until the roadshow.
Sok Hour said that PESTECH Cambodia Plc, will become the 13th security-listed company in Cambodia and the second listed this year to raise funds through an equity public offering. He said that among the 12 securities listed company on CSX, six companies are stock-listed, and six companies are bond-listed. Those 12 companies have accessed capital up to $240 million from the market.
Through the capital market, the companies do not just receive long-term and more affordable financing, but they also received a tax incentive of up to 50 percent on profit tax depending on the size of the IPO, build brand and reputation, Sok Hour added.
“I strongly believe that this trend will continue toward the betterment of the capital market and I also would like to call upon all stakeholders to continue their strong support so that this type of financing will one day become the major factor of private sector growth in Cambodia,” Sok Hour added.
“For potential investors, I encourage you to look deeper into our listed stock. We are ready to welcome one or two more stocks which will be there before the end of the year. However, for any company, I encourage them to diversify their financing sources and not to rely only on bank loans,” Sok Hour added. Sou Socheat, director-general of the Securities and Exchange Commission of Cambodia (SECC), welcomed the move. “We have approved the company’s IPO process and they will continue the process of subscription and listing on the market soon,” he said, adding that even though there are challenges in the market we will still be able to move on. “Thanks to the investors’ confidence for our market, the support from all stakeholders is needed to move forward in our market,” he said.
According to Lim, PESTECH has built some of the largest and important electrical transmission infrastructures in Cambodia, including the 110 kilometre (km) line connecting Phnom Penh-Kampong Cham, the 125km line connecting Kampong Cham-Kratie and one of the 500 kilovolts (kV) transmission lines in Cambodia for the 190km Phnom Penh-Sihanoukville transmission line which was commissioned in January 2020.
He said currently, the company’s major ongoing project in Cambodia is the 190km line connecting Stung Tatay Hydro plant to Phnom Penh. The company said, as of last year, the country’s total 2,276km stock of transmission lines, 501km were built by PESTECH (Cambodia), including Cambodia’s 500kV backbone Sihanoukville transmission line.
Lim said the company expects sustainable growth opportunity for PESTECH (Cambodia), where some 1,700km transmission lines are to be constructed in the next five to six years.