KUALA LUMPUR (April 14): OCK Group Bhd’s (KL:OCK) shareholders have approved a proposed RM91 million investment in a 116 megawatt (MW) large-scale solar photovoltaic (LSSPV) power plant in Malaysia through Solarpack Suria Sungai Petani Sdn Bhd (3SP).
At the company's EGM on Wednesday, 98.9% of shareholders and proxies voted in favour of the investment resolution.
The investment involves OCK acquiring 1,000 redeemable preference shares in Solarpack Asia Sdn Bhd (SPK Asia), which holds a 49% stake in 3SP, at an indicative enterprise value of RM350 million.
It also involves SPK Asia’s holding company, Spain-based Zelestra Corporacion SAU, novating a loan of RM14.23 million to OCK, which OCK will pay in cash to Zelestra.
The loan relates to an outstanding amount owed to Zelestra by JKH Renewables Sdn Bhd. JKH currently holds a 51% stake in 3SP with SPK Asia owning the remaining 49%.
3SP is the developer and operator of a 116MW LSSPV plant in Kedah, commissioned under Malaysia's Large-Scale Solar 3 programme. The plant, which began commercial operations in March 2022, is backed by a 21-year power purchase agreement (PPA) with Tenaga Nasional Bhd (KL:TENAGA).
OCK currently manages 29 solar generation assets in Malaysia.
For FY2023, OCK recorded a revenue of RM722.78 million, of which RM54.32 million came from its green energy and power solutions segment.
OCK intends to fund the investment through internal cash reserves and bank borrowings. As of Nov 25, 2024, OCK had borrowings of RM829.96 million, with a net gearing ratio of 1.03 times. Post-investment, borrowings are expected to increase to RM920.96 million, with gearing rising to 1.15 times.
At the time of writing, shares of OCK closed half a sen lower at 40 sen, giving the group a market capitalisation of RM428.93 million.