KUALA LUMPUR (May 17): Chin Hin Group Bhd is disposing of its remaining 19.34% stake in Solarvest Holdings Bhd for RM103.28 million cash or 80 sen per share to Divine Inventions Sdn Bhd in a related party transaction (RPT).
Shares of Solarvest settled at 78 sen on Tuesday (May 17).
The deal is an RPT as Divine Inventions, controlled by the Chiau family, also owns 36.6% in Chin Hin.
Chin Hin executive chairman Datuk Seri Chiau Beng Teik also owns 1.4% direct stake in Solarvest, while Chin Hin group managing director Chiau Haw Choon owns 0.08% in the solar company.
Minus related expenses for the disposal, Chin Hin intends to utilise the entire proceeds for repayment of bank borrowings.
“The proposed disposal will also enable Chin Hin to record a one-off pro forma gain of RM35.68 million, which may vary depending on the carrying value of Solarvest shares at the time of completion of the proposed disposal,” it said.
Chin Hin’s exposure to the solar space started in 2017 when it bought 45% in large scale solar (LSS) EPCC specialist Atlantic Blue Sdn Bhd (ABSB) for RM24.75 million.
Solarvest was listed on the ACE Market in November 2019 at 35 sen per share as a holding company for ABSB, during which Chin Hin’s stake was diluted to 41.1%. The company is co-founded by Lim Chin Siu, Edmund Tan Chyi Boon and Davis Chong Chun Shiong and is primarily in the business of solar turnkey engineering, procurement, construction and commissioning (EPCC) service provider.
The proposed disposal is subject to shareholders’ approval at an upcoming extraordinary general meeting (EGM).
Eco Asia Capital Advisory Sdn Bhd has been appointed as the independent adviser to non-interested directors and non-interested shareholders of Chin Hin on the proposed disposal.
M&A Securities Sdn Bhd has been appointed as adviser for the proposed disposal.
Shares of Chin Hin settled up five sen or 1.33% at RM3.80 on Tuesday (May 17), giving the property and construction group a market capitalisation of RM3.36 billion. The counter has gained 45.59% this year.
At Solarvest’s last close of 78 sen, the group has a market capitalisation of RM520.69 million. Year-to-date, the counter has retreated 58.97%.