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Mestron partners Samdo Smart Solar to undertake EPCC for solar power systems on telco towers

Mestron partners Samdo Smart Solar to undertake EPCC for solar power systems on telco towers

18 Dec 2020

Steel pole maker Mestron Holdings Bhd is teaming up with Samdo Smart Solar (M) Sdn Bhd to jointly undertake engineering, procurement, construction and commissioning (EPCC) services for six solar power systems for telecommunication towers in Malaysia. 

Mestron’s wholly-owned Mestron Engineering Sdn Bhd (MESB) inked a joint venture agreement with Samdo for the partnership today.

Samdo, according to Mestron in its stock exchange filing today, is the appointed service provider of a local telecommunication service provider to provide the EPCC services for the towers that are spread out in Peninsular and East Malaysia.

Under the partnership, the two parties shall undertake the EPCC services on a 50:50 profit-sharing basis.

Samdo also provides a warranty to MESB that each tower or facility shall provide an average profit not less than RM70,000, with any shortfall in the guaranteed profit to be covered by Samdo’s profit-portion in the deal. In the event the shortfall exceeds Samdo’s entitlement, the amount will be deemed a debt Samdo owes to MESB, which has to be paid within 14 days from the date MESB sends a demand in writing.

Mestron estimated the total investment outlay for the partnership to be RM1 million, which it intends to finance using internal funds.

The partnership, which is expected to contribute to its future earnings, will also allow the group to gain the necessary exposure in the renewable energy sector, and to build up its technical expertise and track record to be able to take on future business opportunities in the sector.

Shares of Mestron closed unchanged at 19.5 sen apiece today, giving the company a market capitalisation of RM154.73 million, after 12.65 million shares were traded.

Source: The Edge Markets