KUALA LUMPUR (March 1): After spending almost two decades listed on the ACE Market of Bursa Malaysia, Genetec Technology Bhd is now eyeing a move to the Main Market.

In a bourse filing, the contract manufacturer of automated industrial equipment proposed a transfer to the Main Market to enhance the company’s credibility, prestige and reputation, as well as accord the group greater recognition and support amongst investors, in particular among larger institutional and foreign investors.

“Given the company’s unique position in the growing electric vehicle (EV) and energy storage segment, the proposed transfer will further enhance the company’s ability to grasp the opportunity arising from the growing global trend for environmental, social and governance (ESG) investments to attract more investors who invest based on the ESG criteria,” it added.

Genetec said it has met the requirements for the proposed transfer of its listing to the Main Market as set out in the equity guidelines issued by the Securities Commission Malaysia (SC) and the Main Market Listing Requirements of Bursa Securities.

For the period from March 1, 2022, up to Feb 28, 2023, Genetec has recorded a daily market capitalisation of between RM1.11 billion and RM2.1 billion based on the daily volume-weighted average price of Genetec shares.

Pursuant to the equity guidelines, the daily market capitalisation based on the daily volume-weighted average price of the ordinary shares for the one-year period ending on the last business day of the calendar month immediately preceding the date of submission to the SC must be at least RM500 million.

Additionally, the equity guidelines stated that the company needs to have a healthy financial position and liquidity, which comprised of a sufficient level of working capital for at least 12 months from the date of the transfer, and positive cash flow from operating activities in the most recent financial year based on the audited financial statements.  

The company noted that it recorded a positive cash flow from operating activities before working capital changes of approximately RM66.3 million.

However, the group recorded a negative net cash flow from operating activities after working capital changes of approximately RM99.6 million, based on the audited financial statement March 31, 2022 (FY2022).

As such, Genetec said it applied for relief to SC on Feb 17, 2023. Nonetheless, the group is expected to record a positive net cash flow from operating activities after working capital changes for the financial year ending March 31, 2023 (FY2023).

Meanwhile, Genetec also noted it has satisfied the public shareholding spread requirement of the listing requirement of at least 25%. According to the group, 65.8% of the issued Genetec shares are held by the public as at the latest practicable date (LPD) of Feb 16, 2023.

Genetec said that barring any unforeseen circumstances and subject to requisite approvals from the SC and Bursa Securities, the proposed transfer is expected to be completed in the third quarter of this year.

SJ Securities and Astramina Advisory have been appointed as the principal adviser and financial adviser to the company respectively for the proposals.

Shares in Genetec closed up five sen or 1.81% to RM2.81, giving the group a market capitalisation of RM2.11 billion.