Metronic’s JV signs solar power purchase agreements worth RM50 mil
12 Jul 2022
Loss-making Metronic Global Bhd said its joint venture (JV) company has entered into two power purchase agreements (PPAs) in Kedah with a total contract value of RM50 million.
In a filing with Bursa Malaysia, Metronic said the PPAs signed by Sinaran PPA Sdn Bhd involve a capacity of 4,121 kWp for a term of 25 years.
Metronic owns a 70% stake in Sinaran PPA, according to the group’s past filings with the stock exchange.
The construction and installation of the solar photovoltaic (PV) facilities under the PPAs are expected to be completed in the fourth quarter of 2022 with the commencement of operations immediately thereafter.
Metronic, which is involved in the provision of hardware and software required for buildings’ control and management, said Sinaran PPA’s partner in the JV is Earthtech Sdn Bhd.
“The long-term recurring income to be generated from the leasing of the electricity generated from the solar PV facility to the site owners under the solar leasing activities to be undertaken by Sinaran PPA is also expected to contribute positively to the future earnings of the group,” said Metronic.
Metronic said it has raised the required funds via its recent RM77.97 million rights issue for Sinaran PPA to kick-start the solar business.
“Apart from the two solar leasing contracts mentioned above, Sinaran PPA is in the midst of negotiations on the potential solar leasing contracts with owners of buildings at various locations in Selangor, Kedah, Penang and Perak with a total proposed size of 29,260 kWp and an estimated total contract value of RM300 million for a term of 25 years,” it added.
Metronic said proceeds from the rights issue will also be used to finance the acquisitions of the materials, machinery and commissioning of the factory buildings as well as preparing Sinaran PPA to undertake a further 29,260 kWp of potential contracts.
“Such funds are also expected to strengthen Sinaran PPA’s financial position moving forward thus enabling it to approach more and bigger potential clients for solar leasing contracts in the future,” it said.
Metronic’s share price closed 1.5 sen or 15.79% lower at eight sen, giving the company a market capitalisation of RM121.44 million.
Source: The Edge Markets