PETALING JAYA: Kejuruteraan Asastera Bhd (KAB) has ventured into the solar photovoltaic (PV) energy business via a binding term sheet entered into by its wholly owned subsidiary KAB Smart Solar Energy Sdn Bhd with Mayang Hijau Sdn Bhd, Evergreen Thumbsup Sdn Bhd and Heng Boon Liang.
Under the term sheet, it will subscribe for 800,000 ordinary shares representing an 80% equity stake in Mayang Hijau for a cash consideration of RM800,000.
In turn, Evergreen Thumbsup will subscribe for 199,999 ordinary shares into the company for RM199,999 and Heng will transfer one ordinary share to Evergreen Thumbsup.
After completion, Mayang Hijau will be an 80% indirectly owned company of KAB with the remaining 20% stake held by Evergreen Thumbsup
Recently, Mayang Hijau entered into a solar supply agreement to finance, design, construct, own and operate a 1.58-megawatt peak solar PV energy generating system under a build-operate-transfer arrangement, with the expected commercial operation date by the third quarter of 2021.
It is also in negotiations to secure a cumulative capacity of 10-megawatt peak of contracts, in which it will be responsible for the operations and maintenance of the solar pv system for a concession period of 25 years.
At the end of the contract period, the ownership of the installed solar panels will be handed over to the customers.
According to KAB’s Bursa disclosure, the rationale behind the transaction is part of its expansion strategy and will mark its venture into the solar industry which will establish a steady stream of recurring revenue that complements its existing core earnings.
Its managing director Datuk Lai Keng Onn is confident that the proposed subscription will enhance its recurring income stream from the existing core businesses and subsequently create more value for all its stakeholders.
“As a responsible corporation, besides financial returns, we also look beyond the environmental, social and governance criteria and the sustainable development goals that deliver long-term positive impact to the society, environment and the performance of the business,” he said in a press release.
