Pestech International Berhad, a Malaysian power technology firm, announced its intention to list a local subsidiary on the Cambodia Securities Exchange in a disclosure sent to Bursa Malaysia, the Malaysian stock market operator, on Thursday.
Pestech (Cambodia), which builds electrical substations and transmission lines, has been incorporated in Cambodia since 2010.
The company has completed construction on a transmission line between Kompong Cham and Phnom Penh and has plans for two more lines, one stretching from Sihanoukville to Phnom Penh and another from Kompong Cham to Kratie, according to Charles Tan, a spokesman for Pestech International.
“We are making preparations to submit our IPO [initial public offering] by May,” Mr. Tan said on Monday. “And we hope to obtain an approval by the end of the year.”
Mr. Tan said that on top of the opportunity to raise income by issuing shares, listing on the CSX was part of Pestech’s intentions to make Cambodia its headquarters for expanding its activities in Southeast Asia.
“We want to build the Cambodia subsidiary into a regional hub for Indochina,” Mr. Tan said. “So any deals through Laos and Myanmar, for example, would be facilitated by our Cambodia office.”
Diamond Power, another Pestech subsidiary, won a $92 million contract in April to oversee the installation of a 230-Kilovolt line between Kompong Cham and Kratie, which is being partly developed by Pestech Cambodia. The project is scheduled to be completed in 2017 and is expected to draw electricity from the Lower Sesan 2 hydropower dam in Stung Treng province, also set to go online next year.
Pestech’s announcement follows a conference last week during which government officials urged the private sector to increase investment in the country’s power and transmission needs in response to rising demand for energy.
Lamun Soleil, director of CSX’s securities market operations department, said he welcomed Pestech’s plans, adding that attracting firms that operate regionally was part of a wider strategy to raise the bourse’s credibility.
“The company has approached us in the past,” Mr. Soleil said. “But this disclosure shows some more commitment, and we hope it can be complete by the end of this year.”
The Phnom Penh Special Economic Zone, Taiwanese garment manufacturer TY Fashion and the Sihanoukville Autonomous Port are also preparing IPOs for this year.
In line with its plans to attract more firms, the CSX signed memorandums of understanding (MoUs) with the Hanoi Stock Exchange and Lao Securities Exchange on Friday to bring more regionally-focused companies to the Cambodian bourse in the long term.
“This is just the beginning of our cooperation in the region to attract firms,” Mr. Soleil said. “The MoUs will allow us to share market information, experience and eventually connect our markets.”
© 2016, Tej Parikh. All rights reserved.