KUALA LUMPUR (Sept 7): Kejuruteraan Asastera Bhd (KAB) has proposed to diversify into the sustainable energy solutions (SES) segment, and is planning to raise RM119 million from a private placement partly to fund the diversification.

“As part of the group’s strategy to diversify its business and create an additional source of income on top of the existing contribution from its core mechanical & electrical engineering business, the group has been steadily venturing into the SES business since 2019.

“In view that both businesses are complementary with each other and may share similar target customer segments, this initiative is in line with the group’s aim of becoming a one-stop engineering and energy solutions provider in the market,” KAB said in a filing with the stock exchange on Wednesday (Sept 7).

As the SES business is anticipated to contribute 25% or more of the net profits and/or result in a diversion of 25% or more of the net assets moving forward, the KAB board will be seeking approval from its shareholders for the proposed diversification at an extraordinary general meeting to be convened later.

The group is also planning to raise RM119.18 million from a private placement of up to 351.58 million new shares, representing up to 20% of its total number of issued shares, to independent third party investors to be identified later.  

The bulk of the funds to be raised (RM49.65 million) will be used to fund existing and future SES projects, and RM36 million and RM32 million for working capital and repayment of bank borrowings, respectively.

KAB’s share price closed half a sen or 1.22% higher at 41.5 sen.