KUALA LUMPUR (Sept 6): Property developer Seal Incorporated Bhd is subscribing for RM15 million worth of shares in two Perak-based companies, in a move to diversify into the renewable energy (RE) business.

Seal said it is subscribing for 387,500 new redeemable convertible preference shares in Hutan Melintang Power Plant Sdn Bhd (HMPP) for RM5 million. The group is also subscribing for 222,234 redeemable convertible preference shares in Ikhtiar Gawa Sdn Bhd (IGSB) for RM5 million, and another five million redeemable preference shares in IGSB for RM5 million.

In a bourse filing, Seal said the sole shareholder of HMPP is Tan Tang Seong. He is also the shareholder of IGSB, along with Tan Shun Yu.

HMPP is principally involved in constructing and operating biomass power plants which use the empty fruit bunches from oil palm as the primary feedstock. The company has obtained two feed-in-tariff approvals from the Sustainable Renewable Energy Authority (Seda) to construct and operate two biomass power plants located in Teluk Intan with a net power generation capacity of two megawatts (MW) and eight MW respectively.

Meanwhile, IGSB is principally involved in operating a palm oil mill, which is presently under construction with an installed capacity to process 60 tonnes of oil palm fresh fruit bunches per hour. The palm oil mill is integrated with the biomass power plants owned by HMPP, and IGSB will be the main supplier supplying empty fruit bunches to HMPP as feedstock for its biomass power plants.

Seal said the proposed investment presents an opportunity for the group to diversify its existing businesses into RE, and aligns with the government’s effort to decarbonise the power sector.

Additionally, the venture into biomass RE will enable Seal to generate more consistent revenue and profits, it said.

For the financial year ended June 30, 2023 (FY2023), Seal’s net profit more than doubled to RM11.74 million from RM4.32 million a year earlier, as revenue rose 440% to RM51.5 million from RM9.54 million.

Seal Inc shares hit a high of 60 sen on Aug 17 — the highest since Jan 31, 2016, when the stock price was 61 sen. On Wednesday, the counter closed at 56.5 sen, with a market value of RM214.49 million.

In May, Seal saw the emergence of Genetec Technology Bhd co-founder Aaron Chen Khai Voon as its largest shareholder via a placement exercise. He then upped his stake in the group to 30.49%, from 28.93%.