KUALA LUMPUR (Jan 31): Mikro MSC Bhd has proposed to dispose of its 25% stake in biomass fuel exporter Bio Eneco Sdn Bhd in exchange for a 25% stake in Elridge Energy Holdings Bhd.

In a bourse filing on Wednesday, the power safety device maker said it has entered into a conditional share sale agreement with an undisclosed vendor for the deal.

The company said Elridge Energy is in the midst of preparing an application to list on the ACE Market of Bursa Malaysia. Besides this, no other details pertaining to Elridge Energy were disclosed.

Mikro MSC said the "shareholder/vendors" of Bio Eneco — who were not named in the filing — will undertake a similar deal, disposing of the remaining 75% stake in Bio Eneco to Elridge Energy, for shares in Elridge Energy.

The shares in Bio Eneco will be acquired by Elridge Energy from all vendors for RM34.98 million based on the issue price per consideration share of 2.12 sen, to be settled fully via the issuance of 1.65 billion consideration shares, the company said.

“The agreed basis of consideration in respect of the [Bio Eneco shares] was arrived after taking into consideration the audited net assets of Bio Eneco as at Dec 31, 2023, of RM35.03 million," it added. 

Among the requisite conditions of the deal is that Elridge Energy must get Bursa Securities’ approval for its IPO.

The proposed share exchange is expected to be completed by Jan 31, 2024, according to Mikro MSC. It added that the proposal is not subject to the approval of its shareholders.

Based on Mikro MSC’s prior filings, the company had acquired its 25% stake in Bio Eneco from the Bio Eneco’s “major shareholder” Yeo Hock Cheong for RM75 million — RM22.5 million in cash and the balance via the issuance of 328.13 million Mikro MSC shares at 16 sen per share or a total of RM52.5 million.

As a result of acquiring the 25% stake in Bio Eneco, which was completed in two separate deals, Yeo emerged as Mikro MSC’s largest shareholder in September last year with a 30.57% stake.

In January this year, Yeo disposed of 165.9 million Mikro MSC shares for RM43.13 million at 26 sen apiece, prior to acquiring 53.51 million shares at 20 sen per share or a total of RM10.7 million.

The transactions saw Yeo’s stake in Mikro MSC fall to 20.1%.

According to a circular dated Aug 18, 2023, Yeo was expected to hold a 34% direct stake in Bio Eneco after Mikro MSC’s acquisition of a 15% stake in Bio Eneco — that bumped its equity interest in the biomass fuel exporter to 25%.

It cannot be ascertained whether Yeo remains a shareholder of Bio Eneco.

Shares in Mikro MSC ended half a sen or 2.27% lower at 21.5 sen, giving the company a market capitalisation of RM230.8 million.