IPO: Asia Bioenergy

Its primary role is that of a strategic advisory group with focus on companies from the biotechnology and biofuels sector.

It raised Rm12.9 million from its listing exercise, the bulk of which – rm8 million – the company plans to park in a technology incubation fund.

This fund will be sued for its existing incubatee companies and new investments, which primarily target early stage investments in the bioenergy industry. The incubation programme involves nurturing and assisting start ups to grow in the marketplace and will include but not be limited to providing financing, value added services, infrastructure and other support services.

From the remaining amount, rm2 million has been earmarked for R&D and related activities as well as capital expenditure, while rm1.4 million is for working capital. Some rm1.5 million will be used to settle estimated listing expenses.

Its major investment projects include Crand Inizhio Sdn Bhd, ECO Sponge Sdn Bhd, Nexfuel Sdn Bhd and Platinum Energy.

However, among the risks it faces going forward are its dependence on its incubatee companies and the bioenergy industry as well as its limited operating history. Net profit from its associates accounts for the bulk of the company’s net profit.

Investments in start-ups and companies in the early stages of development in new and rapidly evolving technologies or industries carry a higher degree risk.

Also, given the focus of its incubatee companues, the company admits that its fate is tied to the prospects of the biofuel and biodiesel industry.

In order to mitigate this, it may in future diversify its investments into other industries to less reliant on the risk of a single industry.

Listing on 12/Dec/2008.