Green & Smart announce plans to float on AIM

Renewable energy group Green & Smart Holdings has announced its intention to float on London’s junior market, AIM.

The company, that designs and builds biogas power generation plants, plans to raise about £5m through an initial public offering, placing shares with institutional and other investors.

The offering is likely to value Green & Smart at around £25.9m, and already chatter in the City suggests that the group has already support of around £3m from UK and Malaysian investors, analysts said.

It will use the IPO proceeds to fund the construction of two biogas power plants, which will be owned and operated by the group.

Directors of the business believe its admission to AIM will enhance the group’s “credibility and profile”.

The 30 year old business uses these power plants to capture greenhouse gases from palm oil mill waste ponds in Malaysia and produce electricity. It has completed a number of projects in Asia, but in recent years it has focused on wastewater treatment for the palm oil industry after the Malaysian government legislated that mills should treat the environmentally damaging palm oil mill effluent, a wastewater discharged from the sterilisation process, as a by-product of the production of crude palm oil.

Chief executive Sivadas Kumar, said: “As worldwide demand for palm oil continues to rise, Green & Smart expects to benefit and to expand its market share in Malaysia through its attractive proposition to those operating in the palm oil industry.”

Analysts familiar with the business believe the market opportunity is “large”, as there are 443 existing mills in Malaysia and a further 24 under construction.

The Government has mandated all new plants and those applying for expanding output to have plans for biogas capture in place.

Legislation, planned for 2017 and now under discussion, is for it to be mandatory for all mills to have biogas capture/methane avoidance facilities in place by 2020. G&S eases the process for mill owners by funding plants, constructing and operating them and then revenue sharing with the mill.

With 26 contracts in the current pipeline, the group expects to have an estimated market share of 38.4pc for plants in progress, by the end of 2017, which it said will make it the largest biogas player in Malaysia.