KUALA LUMPUR (April 27): Kejuruteraan Asastera Bhd (KAB)’s wholly owned subsidiary KAB Energy Holdings Sdn Bhd (Kabeh) has received shareholders' approval to proceed with the acquisition of PT Inpola Mitra Elektrindo (PT IME), for RM75 million.
In a Bursa Malaysia filing, the electrical and mechanical engineering services provider said Kabeh proposed to acquire a 100% equity interest in PT IME, which owns a mini-hydropower plant, from Sarawak Cable Bhd and other minority shareholders.
The transaction amount comprises a sale shares consideration of RM10,000 and the settlement of debts, liabilities and shareholder’s advances of PT IME, capped at RM75 million and to be satisfied entirely in cash.
KAB said PT IME owns and operates an 11 megawatts mini-hydropower plant in the district of Pakpak Bharat, North Sumatera, Indonesia.
“The power plant was developed, owned, and operated by PT IME under a power purchase agreement (PPA) with PT Perusahaan Listrik Negara (PLN), the state-owned electricity company of Indonesia, with an initial concession period of 20 years from the commercial operation date, which was achieved on Oct 12, 2021,” it said in the filing.
Upon completion of the proposed acquisition, it is expected to provide KAB with a stable and recurring income stream from PT IME's mini hydropower plant, as per the PPA with PLN.
“We are delighted to announce that our shareholders have overwhelmingly supported the passing of the ordinary resolution, reflecting their confidence in our strategic direction and vision for the future,” KAB group managing director Datuk Lai Keng Onn said.
He said the proposed acquisition marks an exciting milestone for KAB, as it provides a stable recurring source of income to the group while giving a direct foothold in the lucrative hydropower industry.
“This move is in line with our overall business strategy in expanding our suite of solutions for the sustainable energy solutions (SES) segment to meet our customers’ every-growing needs.
“Moving forward, KAB is committed to pursuing larger and more ambitious sustainable energy projects to further drive the growth of the SES segment as global demand for such solutions continues to rise," he added.
The group anticipates the SES segment would be the main contributor in line with anticipated improvement in financial performance, and eventually achieve more than 50% operating profit contribution in the foreseeable future.