Gunung Capital to acquire renewable energy assets for RM80.9m
07 Aug 2020
Gunung Capital Bhd’s 90%-owned subsidiary Gunung Hydropower Sdn Bhd has entered into an indicative term sheet with vendors to acquire stakes in companies with hydropower renewable energy assets for RM80.9 million.
According to the group’s Bursa disclosure, it intends to acquire a 70% stake in Zeqna Corp Sdn Bhd, Koridor Mentari Sdn Bhd, Denai Delima Sdn Bhd, and 100% stake in Cabaran Hijau Sdn Bhd and Selat Serasi Sdn Bhd.
Gunung Capital stated that the energy asset of the companies have an estimated combined installed capacity of 56MW and upon commissioning it expects a RM78 million topline contribution from hydro plants.
Meanwhile, it gave a breakdown of the indicative valuation of the companies, with RM24.6 million for a 70% stake in Zeqna, RM5.5 million for a 70% stake in Koridor Mentari and RM50.8 million for the 70% equity in Denai Delima, 100% stake in Cabaran Hijau and Selat Serasi.
Gunung Capital executive director Tan Sri Dr Ali Hamsa is confident on renewable energy’s prospect moving forward, particularly with the awareness and the urge for governments around the world to transform from the traditional energy system to energy-efficient renewable power sources.
“This is also in line with the government’s aim to achieve 20% of the country’s electricity generation to be from renewable sources by 2025,” he said in a statement today.
Furthermore, Gunung Capital is poised to become a leading player in the Malaysian renewable energy sector as it continues building and operating small-scale hydro plants and it is upbeat on its long-term growth prospects, on the back of its strategic plan to create a sustainable and recurring revenue stream.
Ali stated that the group will leverage its sturdy balance sheet with a total cash and cash equivalents of more than RM50 million and insignificant borrowings, to capture opportunities that promote business expansion.
He elaborated that the feed-in-tariff platform which awards premium tariff for electricity generated from non-fossil fuel sources, is a financially sustainable business that provides a reliable, cost-effective energy solution, and generates a strong long term cash flow for Gunung Capital.
“The fundamental objective for us is to secure a long-term sustainable income stream for the Group, simultaneously creating value for our shareholders, and to provide an environmentally friendly, sustainable and a conflict-free energy source,” said the executive director.
Source: The Sun Daily