Pestech (Cambodia) Plc, a subsidiary of Malaysia-based Pestech International Bhd, is set to list on the Cambodia Securities Exchange (CSX) this year after being approved in principle for two years.
Sou Socheat, director-general of the Securities and Exchange Commission of Cambodia (SECC) said yesterday that the company is in preparing documents and attracting investors.
“Now the working process is almost finished because we already provided the company an approval in principle. We hope the company would be ready for an IPO [initial public offering] this year,” he said.
The SECC approved an application to list power infrastructure provider Pestech Cambodia in 2018. Socheat said the presence of Pestech (Cambodia) Plc, will attract more companies to the country’s new-born stock exchange.
“Our stock exchange has been growing since 2019 and, with the present of Pestech, the bourse will be more attractive,” he said.
According to Socheat, the COVID-19 pandemic is shocking the market globally. However, investors’ sentiment has seen a rebound since April.
Pestech CEO and Executive Director Paul Lim Pay Chuan told The Edge news agency that the long-awaited spin-off of its unit Pestech (Cambodia) PLC in Cambodia, is set go public by the middle of this year.
“It took us a fair bit of time because we are trying to get industry players who can add value to our business operations in Cambodia to become our investors, rather than just normal financial investors,” he said.
At the moment, Pestech has narrowed them down to a technological partner from Germany as the cornerstone investor, with another two possible candidates from China and Italy. Paperwork is being finalised and the IPO is pending final approval.
Lim says the main objective of the IPO is not to raise funds but to raise the profile of Pestech (Cambodia), which mainly operates engineering, procurement and construction businesses in Cambodia, Myanmar and Vietnam.
Two build-transfer projects in Cambodia are under Pestech (Cambodia), but a concession project is parked under its sister company Diamond Power Ltd.
Considering that the free float requirements for Cambodian-listed companies are very low, Lim said Pestech is taking this opportunity to rope in long-term partners.
“We believe these cornerstone investors could help us grow in Cambodia and the Indochina region. We hope to retain an 80 percent stake in Pestech (Cambodia) at the end of the listing exercise; the rest will be held by the cornerstone investors and public investors,” he said.
Upon listing, Pestech (Cambodia) is expected to be worth about $60 million in terms of market capitalisation. The company plans to raise fresh capital of not more than $10 million.
There are currently five companies listed on the equity side of the CSX – Sihanoukville Autonomous port, Phnom Penh Special Economic Zone, Phnom Penh Autonomous Port, Grand Twin International Cambodia and Phnom Penh Water Supply Authority. ACLEDA Bank will be the sixth equity firm to list on the CSX by the end of this month.
This article was first published in Khmer Times. All contents and images are copyright to their respective owners and sources.