KUALA LUMPUR (March 17): Jentayu Sustainables Bhd (KL:JSB) said the group has aborted its acquisition of hydro assets in Sabah, more than three years after the deals were inked in September 2021.

The agreements for its acquisition of Senja Optima Sdn Bhd, Telekosang Hydro One Sdn Bhd and Telekosang Hydro Two Sdn Bhd were mutually terminated on Monday, according to Jentayu Sustainables’ bourse filing.

Telekosang Hydro One and Telekosang Hydro Two own and operate the 40MW Telekosang Hydro power plant project. Meanwhile, Senja Optima owns 70% in both companies. The remaining 30% stakes are owned by Inno Hydropower (T) Sdn Bhd.

Jentayu Sustainables noted that in January, the Securities Commission Malaysia (SC) denied the group's bid for an extension to complete the deal.

Subsequent to that, the group said it discussed the matter with the vendors and the parties had decided to mutually terminate the deal.

"This decision was made in view of the potential additional cost for a new submission to the SC, expected delays, and uncertainty regarding the timeline for the completion of the proposed acquisition of the hydro assets," it added.

Under the deal, Jentayu Sustainables was to acquire the entire equity interest in Senja Optima from Kasa Tuah Sdn Bhd and Borneo Sustainable Sdn Bhd for RM44.6 million.

It was also to acquire the entire redeemable preference share bases in Telekosang One and Telekosang Two for RM93.6 million and the entire junior bonds in Telekosang One from Jentayu Capital Sdn Bhd for RM38.1 million.

Of the RM173.25 million cash and share consideration attached to the deal, RM160.3 million was to be satisfied via the issuance of new shares in the group.

The deal was deemed a related-party transaction as the vendors are owned by Jentayu executive chairman Datuk Beroz Nikmal Mirdin and his wife, Datin Nurhaida Abu Sahid, who is the daughter of Maju Group executive chairman and former major shareholder of Jentayu Sustainables, Tan Sri Abu Sahid Mohamed.

The now-defunct hydro asset firm acquisitions were part of the group’s move to become a pure-play renewable energy firm.

In conjunction with the hydro asset equity buy, Jentayu Sustainables also proposed to acquire Jentayu Solar Sdn Bhd, which owns and operates a 5.99MW solar power plant in Pokok Sena, Kedah.

Shares in Jentayu Sustainables ended one sen or 2.41% lower at 40.5 sen on Monday, valuing the group at RM178.25 million.