Mackwoods Energy to use IPO proceeds for SHP projects

The Initial Public Offer (IPO) of Mackwoods Energy Limited (MEL), a subsidiary of Mackwoods Pvt. Limited (ML), would be aimed at partly financing the construction, rehabilitation and upgrading of five Small Hydro Power (SHP) projects planned by the company.

This is planned to be done within the precincts of the plantation estates held by Agalawatte Plantations PLC (APL), also a subsidiary of ML, in Nuwara Eliya, Kalutara and Ratnapura Districts, the company prospectus noted.a sum of Rs.175 million would be funded through the monies raised from the IPO, whilst the remainder would be financed by debt obtained from banks, financial institutions and ML, and through internal sources. MEL intends to source the equipment and machinery from reputed suppliers, subsequent to securing requisite approvals. The prospectus added that the Company expects to utilize the funds for this purpose during the FY 2012/13.

The pre-feasibility studies for the SHPS have been carried out by Eng. Prasad Mudugama based on the hydrology studies by Eng. G. T. Dharmasena. According to the company’s prospectus, Mackwoods group has experience in constructing, commissioning and operating SHPS and is confident of securing all approvals for the new projects in a timely manner.

Furthermore, the company also plans to finance, through this IPO, future working capital requirements of the new product lines and services intended to be launched by MEL, amounting to approximately Rs.72 million.

The prospectus also noted that the funds raised through this IPO will not be utilized for the acquisition of any other business.