KUALA LUMPUR (June 18): Biomass boiler company BM Greentech Bhd (KL:BMGREEN) said on Tuesday it had signed a term sheet to fully acquire solar firm Plus Xnergy Holding Sdn Bhd for RM110 million in shares, as it seeks to become the region’s preferred partner for clean energy and water solutions.
The proposed acquisition will be settled through issuance of 81.48 million new shares at RM1.35 apiece, BM Greentech said in a press release. BM Greentech and owners of Plus Xnergy plan to sign a definitive share sale agreement within the next 30 days, it noted.
BM Greentech will concurrently undertake a special issuance of new shares at the same price as the issue price of RM1.35 to its parent company, QL Green Resources Sdn Bhd, a subsidiary of QL Resources Bhd (KL:QL), to maintain QL’s majority ownership after the acquisition. As at June 30, 2023, QL had a 52.6% stake in BM Greentech.
BM Greentech said the proceeds raised from the special proposed special issuance will be used for its business expansion into the clean energy sector. "BM Greentech will inject additional equity funding of up to RM50 million to power Plus Xnergy's business growth and expansion," it said.
"BM Greentech is confident that this acquisition will create further value for its shareholders. The combined entity will be well positioned to capitalise on growing demand for clean energy solutions in Malaysia and the region, benefiting from BM Greentech and QL’s geographic reach," the company added.
According to BM Greentech, Plus Xnergy is a provider of clean energy solutions for commercial, industrial, residential and large-scale solar (LSS) projects including solar farms, and has a nationwide presence in Malaysia. Founded in 2013, Plus Xnergy has over 400 MWp of installed solar photovoltaic capacity, generating 2,000 GWh of clean energy as of March 2024.
"Their focus on energy generation, efficiency, storage, and electric vehicle charging complements BM Greentech’s existing bioenergy, water treatment, and solar energy solutions," BM Greentech said.
The selling shareholders of Plus Xnergy comprise founders and executive directors Oh Zhi Kang and Ko Chuan Zhen, executive director Leong Beng Yew, non-executive directors Oh Siang Hwa and Poh Tyng Huei, as well as private companies Smiling Planet Sdn Bhd and Tenaga Wan Foong Sdn Bhd.
According to the term sheet, Oh and Ko will remain as directors of Plus Xnergy for a minimum of five years. Upon completion of the definitive share sale agreement, Ko will be admitted as a director of BM Greentech with Oh as his alternate, subject to approvals.
The selling shareholders have also given a guarantee that Plus Xnergy will record at least RM44 million in accumulated profit over the next four years.
BM Greentech closed up eight sen or 4.71% at RM1.78 on Tuesday, with 8.86 million shares traded. Its market capitalisation stood at RM918.48 million.
QL settled six sen or 0.95% higher at RM6.36, with 1.58 million shares done. Its market value stood at RM15.48 billion.