KUALA LUMPUR (July 11): BM Greentech Bhd (KL:BMGREEN), or BMG, has proposed to undertake a bonus issue of up to 171.95 million warrants on the basis of one warrant for every four existing BMG shares held by entitled shareholders.
The company will undertake the exercise once it completes the proposed acquisition of the entire stake, or 66.6 million shares, in solar firm Plus XNergy Holding Sdn Bhd (PXH) as well as a special issuance to QL Resources Bhd (KL:QL), which holds a 52.57% stake in BGM. The proposed acquisition and the special issuance were announced earlier on June 18.
The warrants will be issued at no cost to the entitled shareholders. The exercise price of the warrants is assumed at RM1.63, which is equivalent to the five-day volume weighted average market price of BMG shares of RM1.69.
In an announcement to Bursa Malaysia on Thursday, BMG said it has formalised a conditional share acquisition agreement to fulfil the term sheet requirements in BM Greentech’s RM110 million acquisition of solar firm PXH.
The acquisition will be satisfied via an issuance of 81.48 million new BMG shares at an issue price of RM1.35 per share to PXH.
The selling shareholders of PXH 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.
Under the agreement, BMG said PXH must achieve a minimum accumulated profit guarantee of RM44 million over a four-year period, from April 1, 2024 until March 31, 2028.
And to ensure QL maintains its shareholdings in BMG after the acquisition, BMG will issue 90.31 million new shares to QL at RM1.35 per share.
BMG said PXH has a track record and capability in clean energy engineering, procurement, construction and commissioning and asset development, and the proposed acquisition will strengthen BMG’s participation in Malaysia’s net zero journey.
“As the regional leader in biomass energy solutions [and] an emerging rooftop solar photovoltaic company, the proposed acquisition will strengthen BMG’s position as the leader in diversified climate and clean energy solutions provider in the region,” said BMG.
“Since its inception in 2013, the PXH group has achieved a track record of solar PV installed capacity in excess of 400 megawatt-peak (MWp) which generated 2,000 GW hours (GWh) of clean energy as of March 2024,” it added.
BMG, formerly known as Boilermech Holdings Bhd, is principally involved in bio-energy, water treatment and solar energy.
Barring any unforeseen circumstances, BMG's board expects the proposals to be completed in the fourth quarter of 2024, with UOB Kay Hian as the principal adviser.
Shares of BMG closed up two sen or 1.08% at RM1.87 on Thursday, valuing the group at RM964.92 million. QL closed up 21 sen or 3.22% to a near four-year high of RM6.74, translating into a market capitalisation of RM16.4 billion.