KUALA LUMPUR (May 23): Power and water company Malakoff Corp Bhd (KL:MALAKOF) is acquiring two companies involved in manufacturing racking systems and machinery for RM27 million cash.

The group is buying 51% stake in ZEC Solar Sdn Bhd, and 49% stake in TJZ Suria Sdn Bhd from Zelleco Engineering Sdn Bhd, according to its filing on Thursday (May 23).

As at end-December last year, Malakoff's cash amounted to RM2.33 billion, while its total borrowings stood at RM8.84 billion, its latest financial statement showed. Malakoff has been loss-making for the fourth straight quarter throughout the financial year ended Dec 31, 2023 (FY2023).

“The proposed acquisition provides an opportunity for the Malakoff Group to expand its capacity and portfolio in the RE,” it explained the rationale behind the acquisition.

Upon completion of the proposed acquisition, ZEC Solar will become a direct subsidiary of Malakoff, while TJZ Suria will become its indirect subsidiary as it holds the stake via its wholly owned unit Malakoff Technical Solutions Sdn Bhd.

It noted that both ZEC Solar and TJZ Suria are mainly involved in large-scale solar (LSS) photovoltaic facilities and generate electricity for Tenaga Nasional Bhd (KL:TENAGA).

The proposed acquisition is expected to be completed within three months from the signing date of the sale share agreement (May 23), subject to all conditions precedent being fulfilled.

Shares in Malakoff closed 1.5 sen or 2.05% higher to 74.5 sen on Thursday, valuing the company at RM3.73 billion.